Sonia Rykiel files for receivership, looks for buyer
today Apr 30, 2019
Parisian ready-to-wear label Sonia Rykiel, which was bought in 2012 by the Fung family, Jean-Marc Loubier and Singaporean investment fund Temasek, joining forces as the First Heritage Brands group, has filed for receivership in a bid to find a buyer. The news was reported on Tuesday by a source close to the matter, confirming an article by French newspaper Les Echos. FashionNetwork.com was able to confirm that the court accepted the filing on Tuesday at noon.
According to a source, the receivership period is expected to last for two months, in the course of which the court-appointed receiver will be busy looking for potential buyers, seeking to maximise the number of bids and their quality. Sonia Rykiel has been experiencing financial difficulties for several years, and the receivership filing’s objective is to allow the label to continue trading while looking for a buyer. Sonia Rykiel had so far been unable to do so independently, hence the decision to resort to the court.
The label currently has about 150 employees, who will be waiting to see if the receivership will make it possible for one or more of the expressions of interest made manifest in the last few months to turn into reality.
In 2012, Sonia Rykiel - one of France’s last independent labels - decided to sell an 80% stake to Chinese investment fund Fung Brands, the holding company of the Fung family from Hong Kong. First Heritage Brands, the group that was established when Fung Brands grew its stake in Sonia Rykiel to 100% in early 2016, in association with its director Jean-Marc Loubier and Singaporean investment fund Temasek, also owns Belgian luxury leather goods brand Delvaux. The group has reportedly invested nearly €200 million in the label since 2012. First Heritage Brands now intends to divest itself completely of Sonia Rykiel, and hand the label over to a new investor able to fund a fresh relaunch.
In 2016, a few months after the label's eponymous designer and founder died, Sonia Rykiel announced that, due to poor results, it was making a quarter of its employees redundant, as it sought to make a new start. The relaunch efforts were fruitless however. In 2018, according to Les Echos, the label’s revenue fell to €35 million, nearly half of what it was in 2012 when the label was bought, with operating losses of over €30 million.
The number of Sonia Rykiel stores also significantly decreased, falling in a few years from about 30 to 10 monobrand stores (6 of them in France and now only two in Paris), plus a number of department store concessions.
Sonia Rykiel's 50th anniversary, celebrated last year with a series of special events, failed to inject fresh energy into the label’s sales performance. Julie de Libran, Sonia Rykiel’s creative director since 2014, stepped down last month, only a few weeks before the receivership announcement, and the change in ownership that is expected follow.
Last summer, First Heritage Brands appointed a new general manager at Sonia Rykiel, Perry Oosting, replacing Eric Langon, who had led the label since its acquisition in 2012.
Sonia Rykiel, an iconic figure of the Parisian fashion scene, unmistakable for her fiery red hair, died in August 2016 at the age of 86. Known as ‘’the knitwear queen’, Rykiel began her fashion career in 1968, and her figure-hugging sweaters with brightly coloured stripes became her trademark over the years.
Last year, Parisian labels Carven and Lanvin both experienced the same situation as Sonia Rykiel. Both of them were bought by Chinese groups, Icicle and Fosun respectively, and are looking to relaunch themselves.
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