When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Already a subscriber? Log in .

You've reached your limit of one free article.

Get unlimited access to Worldcrunch

You can cancel anytime .


Exclusive International news coverage

Ad-free experience NEW

Weekly digital Magazine NEW

9 daily & weekly Newsletters

Access to Worldcrunch archives

Free trial

30-days free access, then $2.90
per month.

Annual Access BEST VALUE

$19.90 per year, save $14.90 compared to monthly billing.save $14.90.

Subscribe to Worldcrunch

How German Fashion House Escada Clawed Its Way Back From Bankruptcy

A sports collection, new fabrics, fewer gold buttons and an influx of Indian money have Escada back on track. The German clothing company still isn't back to break-even, but sales – up 7% last year – look set to keep rising.

The Escada clothing brand is staging a comeback (Colros)
The Escada clothing brand is staging a comeback (Colros)
Carsten Dierig

BERLIN -- With Berlin Fashion Week -- the first big fashion event of 2012 -- just a week away, excitement is mounting in the world of clothing design. The energy is particularly high at Escada, as the Munich-based brand's new sports line will open the catwalk show in the German capital.

Just over two years ago, this honor would have been unthinkable. Escada, long associated with luxury and glamour, had just filed for bankruptcy. "Obviously, Escada's image suffered from the bankruptcy," says CEO Bruno Sälzer.

But after being written off as dead, the global brand is decidedly back in business. According to Sälzer, turnover for the 2011 business year was some 300 million euros -- up 7% over 2010. In the upscale Berlin department store KaDeWe, Escada now boasts the largest shop-in-shop surface area. "Both the industry and consumers have regained trust in the brand," says Sälzer.

Mid-term, the Escada CEO sees an increase in turnover of up to 500 million euros. That's still far less than the company earned during its boom years. It's also short of what Escada needs to actually turn a profit, which is something the company hasn't managed to do for quite a while.

Years of mismanagement, frequent changes at the helm, and some fashion faux pas had brought Escada to the edge of ruin. Sälzer, 54, who was brought in during in 2009 to clean up the mess after a successful run as the top executive at Hugo Boss AG, got the collections back on track, but couldn't manage to straighten out the finances in time. After attempts at re-scheduling debt failed, he was forced to declare bankruptcy.

A fresh debt-free start

Today, Sälzer calls the measure liberating because it enabled Escada to start anew. Just five days into bankruptcy proceedings, trustee Christian Gerloff sold the operational business to an investment company owned by the family of Indian steel magnate Lakshmi Mittal.

Since then, Megha Mittal, the 34-year-old daughter-in-law of the patriarch and a former Goldman Sachs investment banker, has been chairwoman of Escada. "For me it was a dream come true," says Mittal, who bought several hundred thousand euros worth of Escada clothing right after the deal went through.

The Mittal family is said to have paid 70 million euros for the company itself, and a further 30 million for development. Bruno Sälzer stayed on, and has continued to nurture the company back to health by automating production, reducing the size of collections, and giving the lines a new, modern look with different fabrics, more color, and fewer gold buttons.

Sälzer also repositioned the brand within the luxury market by reducing prices at an average rate of about 20%. Two-thirds of sales derive from the company's main line. The Escada Sport collection, which is aimed at younger customers, accounts for the other third. Just as he introduced women's fashion at Hugo Boss, Sälzer may be looking to introduce men's fashion at Escada. But any such strategy will have to wait for fashion weeks of the future.

Read the original article in German

Photo - Colros

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.


The Problem With Always Blaming Climate Change For Natural Disasters

Climate change is real, but a closer look at the science shows there are many factors that contribute to weather-related disasters. It is important to raise awareness about the long-term impact of global warming, but there's a risk in overstating its role in the latest floods or fires.

People on foot, on bikes, motorcycles, scooters and cars navigate through a flooded street during the day time.

Karachi - People wade through flood water after heavy rain in a southern Pakistani city

Xinhua / ZUMA
Axel Bojanowski


BERLIN — In September, thousands of people lost their lives when dams collapsed during flooding in Libya. Engineers had warned that the dams were structurally unsound.

Two years ago, dozens died in floods in western Germany, a region that had experienced a number of similar floods in earlier centuries, where thousands of houses had been built on the natural floodplain.

Last year saw more than 1,000 people lose their lives during monsoon floods in Pakistan. Studies showed that the impact of flooding in the region was exacerbated by the proximity of human settlements, the outdated river management system, high poverty rates and political instability in Pakistan.

There are many factors that contribute to weather-related disasters, but one dominates the headlines: climate change. That is because of so-called attribution studies, which are published very quickly after these disasters to highlight how human-caused climate change contributes to extreme weather events. After the flooding in Libya, German daily Frankfurter Allgemeine Zeitung described climate change as a “serial offender," while the Tageszeitung wrote that “the climate crisis has exacerbated the extreme rainfall."

The World Weather Attribution initiative (WWA) has once again achieved its aim of using “real-time analysis” to draw attention to the issue: on its website, the institute says its goal is to “analyse and communicate the possible influence of climate change on extreme weather events." Frederike Otto, who works on attribution studies for the WWA, says these reports help to underscore the urgent need for climate action. They transform climate change from an “abstract threat into a concrete one."

In the immediate aftermath of a weather-related disaster, teams of researchers rush to put together attribution studies – “so that they are ready within the same news cycle," as the New York Times reported. However, these attribution studies do not meet normal scientific standards, as they are published without going through the peer-review process that would be undertaken before publication in a specialist scientific journal. And that creates problems.

Keep reading...Show less

The latest