Article: Fashion's Growing Toll: Bankruptcy for Ittierre
As of Monday, February 9, 2009, the licensing and production unit of IT Holding SpA, which the parent of Gianfranco Ferre Malo, Exte, and many other Italian fashion brands, announced that it will be filing for bankruptcy protection after running out of cash. There is great fear that all the fashion brands of the organization will go down as well. IT Holding manages under license via Ittierre the Just Cavalli, VJC Versace, Versace Sport, and Galliano labels. Ittierre was placed into administration to allow the group to be restructured and continue its business operations and the divisions shares were suspended on the Milan Bourse following the announcement.
IT Holdings recent financial strands are a result of "the absence of the conditions necessary to continue operations in a regular course of business; in particular with regards to the availability of the necessary financial resources and continuity of its license agreements." The division of IT Holding that is having problems, Itteirre, is the most profitable part of the fashion group and viewed as the "jewel" of the organization's reputation. With the filing of bankruptcy for this division, there are only dark forecast as to what will happen to the remaining brands under IT Holdings. The company has basically been seen as invaluable and has large amounts of debt.
Versace has been trying to buy back VJC Versace and Versace Sport licenses on concerns over what might happen to Ittierre if IT Holding opens its capital to private equity but was unable to strike a deal. There is only hope that finances and restructuring will work out for the popular Italian fashion group. This article is clear indicator that the current economic situation is an international phenomena and not just limited to the United States. Not even high fashion is able to survive in the economic crisis.
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