LONDON — The ailing Italian luxury house Roberto Cavalli has shuttered its North American operations, hours after the brand said it was seeking a deal with creditors to stave off a bankruptcy filing and less than a week after the departure of its creative director, Paul Surridge.
On Friday, the brand confirmed in an emailed statement that it intended to file a plan with Italian courts that would allow the business to keep running while it secured new investors or ownership. The fashion house, headquartered in Florence and famous for its flesh-baring, flamboyant designs (often in animal prints), has fallen from favor with its fan base in recent years, struggling to turn around falling sales and to maintain its profile in an increasingly competitive global luxury market dominated by the major conglomerates.
The Italian private equity company Clessidra has owned a 90 percent stake in Cavalli since 2015. Speculation that it wanted to offload the beleaguered fashion investment grew in recent months, fueled by news of discussions with a number of prospective bidders, including the controversial German fashion designer Philipp Plein and the United States-based investment firm Bluestar Alliance.
By Friday, however, no deal had been announced, though a Cavalli spokesman confirmed that discussions were continuing “between shareholders and parties potentially ready to inject cash in Cavalli to provide it with the resources necessary to overcome its current state of financial difficulties.”
Roberto Cavalli M/W: Fall 2019
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And despite the filing made Friday in Milan by lawyers for Cavalli, employees in its eight stores and four outlets in the United States — in upscale spots like Rodeo Drive in Beverly Hills, Calif. — were told to go home and several high-ranking executives based in the United States resigned. A Cavalli spokesman confirmed Monday that Art Fashion Corporation, the name of the brand’s North American subsidiary, would liquidate under Chapter 7 of the United States bankruptcy code by April 4 as part of a restructuring effort.
In Florence, Italy, employee unions have a strike planned for Monday, with protests outside Cavalli headquarters.
The liquidation of the house’s North American operations comes three weeks after questions over the future of Cavalli were raised by unions Filctem Cgil and Femca Cisl. Representatives publicly expressed concern about the future of Cavalli workers and production sites amid rumors of an imminent sale. That a crisis was brewing inside the company was then all but confirmed when Mr. Surridge, the British designer recruited by the Cavalli board to rejuvenate the Florentine fashion house in 2017, confirmed on Instagram that he was leaving.
On March 25, he wrote that he had “reached the conclusion that the mission I have signed on has changed and enters a new direction with a new perspective. I now wish to focus on other projects that I put aside in order to achieve our common goals with the Roberto Cavalli Group.”
Mr. Surridge had been hired as part of a high-stakes turnaround of Cavalli, spearheaded by its chief executive, Gian Giacomo Ferraris. Efforts also included cutting staff by nearly a third and shuttering a string of stores after the departure of the previous creative director, Peter Dundas. However, the design efforts of Mr. Surridge, known as a men’s wear designer, had been met with a lukewarm reception from both critics and the brand’s fans, and a much-hyped new dawn for Cavalli failed to emerge.
