PARIS — This should have been Sonia Rykiel’s moment.
It was, after all, a brand founded by a woman half a century ago. A brand practically synonymous with female liberation and empowerment through clothes. A brand so embedded in the history of French women that a year ago Mayor Anne Hidalgo inaugurated the Allée Sonia Rykiel — the city’s first street named for any fashion designer. A brand, in other words, practically made for a time when women everywhere are demanding their due and seizing the lead.
And yet, this past April, the house of Sonia Rykiel went into receivership and in July, liquidation.
“Until the very last month, the C.E.O. and human resources were looking to save the house, and everybody felt it could be saved,” said an executive, who asked not to be identified because of the company’s nondisclosure agreement. “It’s hard to understand that 50 years of history could be flushed down the toilet. It’s one thing if it was a mess and nobody cared.” But, he said, everyone there had been working tirelessly trying to save it.
So what happened?
Former Rykiel executives blame, variously: bad artistic decisions; corporate micromanaging; technological myopia; disengaged, faraway investors and a lack of due diligence when Chinese investors bought a majority stake in the company in 2012. The answer is probably a combination of all those reasons — as well as bad timing.
In 2015, just as Rykiel’s new management team was implementing a major restructuring plan, France was hit by a series of terrorism attacks that leveled its economy, and domestic retail sales collapsed; the Russian financial crisis wiped out the brand’s second-largest market outside of France — the Rykiel distributor in Russia closed all six stores “overnight,” a Rykiel executive recalled. And when it became clear in late 2018 that Rykiel needed to bring in a financial partner and relaunch, the Yellow Vests protests decrying economic and social inequities erupted throughout France.
But taken together, these facts add up to a tale of just how easy it is to miss the cultural cues that create fashion relevance.
In the Beginning
There was a time — for decades, in fact — that the house of Rykiel was a vibrant and quite profitable business.
It was founded in May 1968, during the student riots in Paris, when a young, flame-haired Parisienne named Sonia Rykiel opened a woman’s wear boutique on the Left Bank to sell saucy knitwear as a counterpoint to the era’s bourgeois tailoring. She designed a stylish-yet-comfortable uniform for working women — her signature was a striped pullover called the “poor boy” that was a favorite of the actresses Anouk Aimée and Audrey Hepburn — and Ms. Rykiel became known as the Queen of Knitwear. She staged shows in her Rue de Grenelle shop, reciting poetry as the models descended the staircase, and opened boutiques in the provinces, so women there could have access to her clothes.
“Sonia epitomized independent women, and made French prêt-à-porter a real thing, after all these men couturiers,” said Valerie Steele, director of the Museum at the Fashion Institute of Technology in New York. “She meditated on what it is to be a woman of work, of pleasure and of desire; she was a woman designing for women, with a more practical eye.”
By the early 1990s, the Sonia Rykiel company had grown into a $75 million concern, with two women’s wear lines, men’s wear, children’s wear, accessories and perfume, and was sold by 250 retailers in 40 countries. Ms. Rykiel, who had Parkinson’s disease, retired in 2009; her daughter, Nathalie, who over the years had held various positions, including artistic director and president, stayed on as chairwoman.
In 2011, the company reported 83.7 million euros (about $92 million at current exchange rates) in revenue, and €1.4 million in losses, which was considered respectable in fashion business circles. But it was stuck. In an industry in which big groups can negotiate reduced rates for advertising and store rents, independents like Rykiel were at a disadvantage.
In February 2012, the Rykiels sold 80 percent of the business for an undisclosed sum to Fung Brands, an investment group led by the billionaire brothers Victor and William Fung of the Li & Fung manufacturing powerhouse based in Hong Kong; the Rykiel family retained the remaining 20 percent, as well as the company’s real estate, which included its flagship Boulevard Saint-Germain location. Nathalie Rykiel, who was downgraded to vice chairwoman, said the deal would “ensure the longevity of the brand.”
Along with Rykiel, the Fungs had purchased the Belgian luxury accessories company Delvaux and the French shoemaker Robert Clergerie with a plan to create a new group à la LVMH Moët Hennessy Louis Vuitton. It was named First Heritage Brands, and run by Jean-Marc Loubier, a former LVMH lieutenant who had served as executive vice president of Louis Vuitton and chief executive of Celine.
But former executives, who asked to remain anonymous because of nondisclosure agreements, said Rykiel was not as strong as the new owners had believed. A year into the deal, the new team found the numbers and sales didn’t quite match up. Worse, Mr. Loubier’s first major hire, the artistic director Gerald da Conceicao, turned out ugly-chic clothes that scared away loyal Rykiel customers. Mr. da Conceicao was soon fired, replaced by Julie de Libran, a French-born, California-raised designer who had spent six years as Louis Vuitton women’s wear studio director. Her debut collection — spring 2015 — was lauded by critics.
“When it’s right, you know it,” Vogue.com wrote.
A Downward Spiral
But with each season, enthusiasm waned. Tension grew so taut between the Rykiel managing director Eric Langon and Ms. de Libran that executives said they were barely speaking. “It was complicated, because we didn’t have the same vision,” Ms. de Libran said recently. The environment was so difficult that a Rykiel production manager —- named as Virginie H. in reports — told a French court that stress at work contributed to a breakdown during which she murdered her 5-year-old daughter and attempted suicide. “Work swallowed me,” she testified.
Meanwhile, the company missed the China boom. Its mainland China retail network — franchises — had long operated independently. Mr. Loubier and Mr. Langon shuttered the business, believing the Fungs would help roll out new wholly owned stores there. Only one was opened — during Mr. da Conceicao’s period — but it failed, and was closed. The Rykiel brand had no serious retail presence in China afterward.
In 2016, Nathalie Rykiel sold the family’s remaining 20 percent stake to the Fungs and relinquished her board seat (though the family kept the real estate). That August, Sonia Rykiel died at 86 from complications of Parkinson’s disease.
“Sonia Rykiel was a free woman, a pioneer who was able to forge her own path,” the Élysée Palace, the office of the French president, said in a statement. “She invented not only a style, but also an attitude, a way of living and of being, and gave women a freedom of movement.”
A couple of months later, the company implemented a major restructuring plan that included closing the Sonia by Sonia Rykiel diffusion line, adding lower-price items to the main Sonia Rykiel collection, and laying off workers. Mr. Langon believed the reorganization would lead to profitability by 2019. Ms. de Libran’s contract was renewed and she was given 10 percent of the company and a seat on the board; the brand was readying for the 50th anniversary, in 2018.
For that occasion, Mr. Loubier dreamed up a plethora of events and products, including a new rectangular handbag called Le Pavé, after the cobblestones that student protesters had hurled at police in 1968; a ready-to-wear fall 2018 show that included a guest set by Bananarama, and the house’s first couture collection, L’Atelier Sonia Rykiel, presented in June at the École des Beaux-Arts.
It was a blitz, and it was expensive.
Rumors flew through Rykiel headquarters that vendors were not being paid, which staff members said made them nervous. And several described how Mr. Loubier began to micromanage. One day, for example, he walked past the Boulevard Saint-Germain shop windows and was so displeased with the displays, he demanded they be redone.
And then Mr. Loubier’s wife, Hedieh Khakbaz Loubier, a jewelry designer with her own brand called Hedieh, added her voice to the mix. In an email seen by The New York Times, Ms. Loubier wrote to her husband after one of the anniversary events: “I just saw the WWD coverage, or lack of I should write, on SR Manifesto soiree.” She then laid out, with bullet points, what she felt was wrong, adding, “Please feel free to forward my comments.” He did, to company executives.
The Last Act
A few weeks later, Mr. Loubier fired Mr. Langon and asked the Clergerie chief executive Perry Oosting to run both brands. For 2018, the company reported sales of 35 million euros ($38.5 million), and a loss of €20 million. In January 2019, Compagnie Financière Edmond de Rothschild was brought in to find an investor or buyer.
The plan, as proposed by the board, was to reduce staff to 50 from 130, and drop annual sales targets to a minimum of $25 million, with the ambition to achieve a bit more eventually. The dream of turning Sonia Rykiel into another Celine had been abandoned.
In March this year, the Rykiel runway show was canceled; Ms. de Libran presented the collection in a showroom. A week later, she left the company. She said she was fired; executives say she quit. She said they owed her money; executives said she was filing thousands of euros worth of personal expenditures as business expenses, which they refused to reimburse. She told The Business of Fashion: “I found myself with my boxes in the street: the American way.” The company refuted the statement.
In April, Rykiel filed for bankruptcy protection and liquidated its business in the United States. It closed all but the six stores in France and the new Monaco boutique. Mr. Loubier quietly packed up his office and moved into the Clergerie headquarters a few blocks away.
Several parties reviewed the dossiers and made bids. By July, three remained: Emmanuel Diemoz, a former Balmain chief executive who planned to concentrate on knitwear and ready-to-wear and shrink the bricks-and-mortar network to the Boulevard Saint-Germain, Cannes and Monaco; the French real estate entrepreneurs Nicole Levy and Julien Sedbon, who wanted to focus on e-retailing; and a Chinese investor, who was conducting due diligence. All three bids depended on the rent negotiations for the Saint-Germain property, which the Rykiel family still owns.
The building is the identity of the brand — like Chanel’s headquarters on Rue Cambon, Hermès’s on Rue du Faubourg Saint-Honoré and Dior’s on Avenue Montaigne. The Diemoz and Chinese bids were dropped, and on July 25, the Paris commercial court rejected the Levy bid, forcing the company into liquidation. Other assets, including the name and the archives, will soon be sold.
Upon hearing the ruling, several Rykiel employees in the courtroom burst into tears. The French designer Agnès Trouble, founder of the Agnès b. brand, told Agence France-Presse, it was as if Ms. Rykiel “has died a second time.”