Sonia Rykiel into receivership due to far “old” clientele and few accessories. Time left to rescue the brand: two months

Tough times for Sonia Rykiel. In fact, the fashion house has gone into receivership: they are now seeking an investor, or a buyer. Founded in 1968 by the same-named fashion designer, who passed away in August 2016 when she was 86, the brand was subsequently bought out, in 2012, by Fung Brands, a Chinese investment fund (now First Heritage Brands), a holding of the Fung family, from Hong Kong, who also own Delvaux and Clergerie. Despite their replacing twice their creative directors, the Chinese fund did not manage to build up the brand’s activities: in 2016, they eventually implemented a plan to reorganize the company. As reported by Les Echos, in 2018 Sonia Rykiel’s revenues went down to 35 million euros (compared to 80 million euros reached in 2012) and operating profits slumped by over 30 million euros. In France, only 150 employees are currently working for the brand. The newly appointed chief executive officer, Perry Oosting, was compelled to cut down costs again, while shutting down the non-profitable stores in Luxembourg, Belgium, England and the United States: in such markets, the brand is running multi-brand stores. As for the reasons behind the current crisis, first of all the brand was not able to rejuvenate the target of their customers, who are 50 years old on average; in addition, accessories have been driving only 15% to 20% of revenues, which is too little compared to the most important luxury brands. Thanks to receivership, the brand can keep working while looking for a suitable solution: either an investor, or a buyer, or selling the brand to a licensee. Time left for the deal: 2 months.

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