Still unsold, Lacroix heads to court

New bidders who do not want to get bogged down in court proceedings could yet emerge.

Christian Lacroix, the ailing French fashion house that was expected to be acquired by a member of the Ajman royal family, will go before court in Paris today for its bankruptcy hearing.

Christian Lacroix, the ailing French fashion house that was expected to be acquired by a member of the Ajman royal family, will go before court in Paris today for its bankruptcy hearing. But doubts have been cast over whether Sheikh Hassan bin Ali Al Nuaimi or the other main bidder, Bernard Krief Consulting, are still interested in the acquisitions after they failed to submit financial guarantees to prove their liquidity and support their proposals.

"There is no more time to prove anything," said Regis Valliot, the court-appointed administrator of Christian Lacroix. "The court sentence has to be delivered [today]." However, Mr Valliot said that "it will not be the end" and added that "everything remains possible" after the ruling. Sheikh Hassan, who is a nephew of Sheikh Humaid bin Rashid, the Ruler of Ajman, could not be reached for comment. Leon Falic, the president of the Falic Group, the US company that owns Christian Lacroix, confirmed that Sheikh Hassan had "not come up with the funds".

A hearing two weeks ago, which considered options for the company, was adjourned because neither Sheikh Hassan nor Bernard Krief Consulting could demonstrate they had enough funding. They were then given until today to justify their case. Sheikh Hassan formally submitted his bid to the Paris tribunal on October 8, an offer that would have saved the jobs of the majority of Christian Lacroix's employees and preserved both the haute couture and ready-to-wear lines.

Bernard Krief Consulting, a French firm, made its ?100 million (Dh551.1m) bid in July, of which ?12m was an investment by Midex Airlines, a cargo carrier based in Abu Dhabi, Vincent de Mauny, the managing director of distribution for Bernard Krief, said last month. The deal would keep the haute couture and ready-to-wear lines and retain all staff, he said. Last month, Mr Falic said Sheikh Hassan's bid was the preferred choice. "If Sheikh Hassan comes through, he is the preferred choice," Mr Falic said on November 17. "If he doesn't come through, then Krief will get the bid. If they don't come through, then there's a continuation plan."

Mr Valliot said he believed that "serious" new bidders who did not want to get bogged down in court proceedings could emerge in the coming months, Agence France-Presse reported. He also did not rule out that Sheikh Hassan might be able to come up with the required liquidity at a later date. Luca Solca, a senior European retail research analyst at Sanford C Bernstein in London, said he was sceptical that a non-industry investor could buy the brand and achieve a good return. "After all, [LVMH], the largest and most capable luxury goods company in the world, could not get any success with it," Mr Solca said.

"There is not only a smaller and smaller space for high-end fashion, but more and more designer brands [are] trying to get a slice of it. This is not a sustainable situation, hence companies are going out of business." Christian Lacroix has failed to make a profit since it was set up by Bernard Arnault, the chief executive of the luxury retail conglomerate LVMH Moet Hennessey Louis Vuitton, in 1987.

In 2005, it was sold to the duty-free retailer Falic Group. But, as the luxury market took a downturn, Christian Lacroix's sales lagged, and the firm filed for bankruptcy protection this year. Last year, the company lost ?10m, on the back of sales of ?30m. * with Agence France-Presse @Email:[e-mail] [e-mail]