Giant Bankruptcy Bankrupt Shadow Of International Fashion Industry

As Italy fashion giant IT Holding group formally filed for bankruptcy protection, luxury enterprise bankruptcy became a reality.

From the Chanel brand that has been bubbling up for a long time to cut down on employees' expenses, sales of Louis Vuitton and other brands have declined, and many designers and brands have withdrawn from this season's fashion week. These international heavyweight luxury brands have become the first leading pawns at risk when their big groups are in danger.

3 billion debt: the fashion giant is facing bankruptcy. The financial crisis has swept the global luxury market. Italy fashion giant IT Holding group, which owns famous brands such as Gianfranco Ferre, and has the licensing and production license of Versace sports apparel, issued a warning on February 9th that the group may be forced to file for bankruptcy protection.

As the global economic downturn is affecting the luxury goods industry, its Lttierre sector may be bankrupt due to cash difficulties.

A spokesman for the group said, "it is very likely that" the whole group will also apply for bankruptcy protection.

IT Holding has about 1800 employees in 2007, with sales amounting to 637 million euros, of which Lttierre accounts for about 60% of the group's total revenue.

It is reported that IT Holding needs to pay debts of about 300 million euros.

IT Holding group said that the emergency takeover clause in Italy law would protect it against creditors temporarily, so that the company could have time to restructure and get out of the difficult position.

A statement issued by Lttierre on the Italy stock exchange shows that the reason for filing bankruptcy protection is "the company lacks the ability to maintain normal operation."

The statement said, mainly because of the "necessary financial resources" problems, and said that the company made the decision to "make the group have the opportunity to restructure and continue to operate."

Cut costs: the shrinking signal of the luxury sector has been hit by the financial crisis, and the global luxury goods industry has to cut costs substantially. IT Holding is only one of the biggest victims.

At present, the overall situation of the luxury goods industry is deteriorating, and sales of perfume and jewellery have dropped sharply. Many fashion conferences have been closed, and every fashion company is under pressure to cut costs.

The Paris high fashion week, which was not long ago, was shortened from 4 days in the previous year to 3 days. Some smaller and relatively well-known companies also withdrew.

Senior experts in the industry predict that in the current economic situation, designers of various fashions will be cautious in choosing luxury routes.

At the end of last year, Italy fashion industry group and trade union organization called for an urgent meeting with Prime Minister Berlusconi to discuss how to weaken the impact of the financial crisis.

The French Chanel brand said recently that it was adopting a more prudent development strategy, including reducing staff's travel expenses, adopting temporary employment methods and ending the global art tour of some products.

Similar to the news, in early February, the global luxury goods giant LVMH group also warned that sales of perfume and name list could not predict the development prospects this year after issuing the profit report last year.

The group also said it might be forced to lay off workers in response to the financial crisis.

According to the announcement issued by Christian Dior holding company holding LVMH shares, its net profit dropped by 9.5% to 796 million euros.

Bulgari, a jewelry brand in Italy, also said that its sales in 2008 had dropped sharply, and its performance in 2009 was not optimistic.

Luxury goods consumption has declined rapidly. In recent years, luxury goods industry is almost a profiteering industry.

However, under the influence of the global financial crisis, luxury goods industry in the world will inevitably be affected, and luxury consumption is decreasing rapidly.

By the end of 2008, according to a latest survey released by JP Morgan Chase Bank, the global luxury market will shrink in 2009, affected by the financial crisis.

The US Morgan Chase Bank's survey includes French luxury goods manufacturer LVMH group, Christian Dior company, Hermes company, Italy Bulgari jewelry company, British Burberry clothing company, Switzerland Swatch company and so on.

According to the survey, global luxury goods sales will be reduced by 4% in 2009.

According to the survey report, sales of major luxury goods such as the US and Japan will decrease significantly, and sales growth of new luxury goods, including China, will drop from 15% to 25% to 3%.

It can be seen that the luxury brand that is at the top of the fashion is the accidental problem brought about by the financial crisis on the surface. However, from the deep level, it is inevitable that the influence of the factors such as the lack of Brand Initiative, the overconsumption of products and the pressure of cost will cause the problem.

In the face of the crisis of these luxury enterprises, people must pay close attention to the reasons why their ability to withstand the crisis is so thin.

It is easy to see that despite their different brand strengths, they are faced with many striking similarities.

Faced with financial troubles and the worsening overall situation of the luxury goods industry, these people feel that the collapse of luxuries is such a simple phenomenon.

More clothing investment information, click here to enter the responsibility editor: Wang Xiaonan