Sonia Rykiel's new owner to be revealed before Christmas
today Nov 28, 2019
The Sonia Rykiel soap opera, with its unhappy ending, might eventually be regarded as one of the fashion world’s main stories of 2019. It is, however, far from over. After an unsuccessful effort to engineer the Parisian label's recovery, the owner, First Heritage Brands, threw in the towel at the start of the year, forcing Sonia Rykiel to look for a buyer, with no success. In July, the Paris trade court ruled that the label should go into liquidation, and it is now time for the tale’s last twist: the auction for the rights to the Sonia Rykiel brand name and its fashion archives.
The bids have been presented to the label's liquidators and were examined in a court hearing on November 25. The court reserved judgement on the case, and will issue a ruling on it within three weeks, by mid-December.
Undoubtedly, the potential buyers of the Sonia Rykiel brand name - and of the rich creative heritage it accrued since it was founded in 1968 - are several, presumably each with a different project for exploiting the label's assets. The final question, whose answer will be revealed before the year-end festivities, is who will have bid highest to become the new owner of Sonia Rykiel.
The city of Paris urged the French Ministry of Culture to enter the fray in order to avoid the dispersal of the label's archives, with a view to possibly showcasing them in a museum. Something on which the judge will also issue a ruling in mid-December.
The liquidation of Sonia Rykiel, in the absence of a buyer for the company, its organisation and assets, led to the dismissal of 131 employees. Given that this summer none of the leading French luxury groups put forward a bid to relaunch the label, the fate of its trademark is uncertain.
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, a group that was created when Fung Brands increased its stake in Sonia Rykiel to 100% in early 2016, in association with its director Jean-Marc Loubier and Singaporean investment fund Temasek, also acquired Belgian luxury leather goods brand Delvaux. First Heritage Brands is said to have invested nearly €200 million in Sonia Rykiel in six years, up to the celebration of the label’s 50th anniversary in 2018, before pulling out.
In 2016, a few months after Sonia Rykiel’s eponymous designer died, a first restructuring led to the dismissal of a quarter of the label’s employees. The relaunch efforts were fruitless however. In 2018, Sonia Rykiel’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.
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