Badgley Mischka has been majority owned by Escada (USA) Inc. since 1992, but the designer eveningwear brand was put on the block last October as part of Escada’s ongoing global restructuring. Although a number of companies have held discussions with the designers and Escada executives over the last several months, they jointly said in a statement on Monday that “an agreement has not been finalized thus far and funding is therefore not available for a spring-summer collection.”
That Badgley Mischka — one of the star labels of the New York fashion scene — could not attract another backer in that time has confounded many of the executives involved in its sale, considering the consistently strong showings by the designers in editorial reviews and in celebrity press clippings. But the high cost of producing the designers’ elaborately embroidered and beaded evening gowns and promoting a designer evening collection that is not yet supported by a high-volume licensing business has been cited as a factor in their lack of aggressive suitors.
The designers allocate a budget in the neighborhood of $500,000 to produce their seasonal runway shows, which Escada was no longer willing to support in the face of its own cost-cutting measures.
Badgley and Mischka, both 43, were not available for comment on Monday, and officials at Escada, which owns an estimated 80 percent of the business, deferred questions beyond the designers’ statement for the time being. The design duo, who are co-presidents of B.E.M. Enterprise Ltd., will continue to seek a new financial partner for the company.
Badgley Mischka, with annual retail sales estimated around $40 million, is expected to continue with the production and deliveries of its fall collection, and will support sales with personal appearances and public relations, according to the statement. However, several positions are expected to be eliminated at the company, which has a staff of more than 60 at its offices at 525 Seventh Avenue, and additional cost-cutting measures will be taken in its operations as the division winds down.
Plagued by declining sales and disjointed product that followed an expensive attempt to modernize the company’s image three years ago with a new designer and a global store overhaul, Escada AG, based in Aschheim, Germany, announced last year it would restructure again to focus on the development of its core Escada labels and divest its other brands, which include its holdings in Badgley Mischka, as well as European labels Louis Féraud and Apriori.