Sonia Rykiel, the Paris fashion house whose iconic founder died in August, may be fighting for its future after its Chinese owners warned they may shut it down if it fails to return to profit, sources in the struggling company said.
“Sonia by Sonia Rykiel”, the firm’s younger and trendier sister, as well as its children’s clothes section, are to be shut down and 79 of the company’s 330 staff are to be laid off, the firm said in a statement.
Those two lines as well as the main Sonia Rykiel line have been loss-making for years, and investors Fung Brands of Hong Kong, who bought a controlling stake in the fashion house in 2012, have reportedly told the French firm to put its house in order or they will pull the plug.
“I believe the Chinese have given us three years to return to profit,” a source in the firm said.
Sonia Rykiel issued a statement on Wednesday, a day after The Irish Times broke the story, which confirmed the redundancies and line closures but which avoided revealing its reportedly disastrous financial state.
It blamed a downturn in business in eastern Europe and Asia, combined with a decline in tourism after recent terror attacks in France and Belgium, for its current woes.
Restructuring operation
“Refocusing the business’s resources on the main collection will strengthen its distribution and enable the organisation to adapt to the challenges of tomorrow,” said the statement, which also said that prices for the main Sonia Rykiel line would be lowered as part of the restructuring operation.
The firm was set up in 1968 in the literary Paris quarter Saint-Germain-des-Prés.
When its founder, Sonia Rykiel, died in August this year aged 86 after a long battle with Parkinson’s disease, she was mourned by French president François Hollande as an inventor of “an attitude, a way of life”.
Rykiel, known as the "Queen of Knitwear", was one of the few women who made it to the top of a sector long dominated by men such as Yves Saint Laurent or Karl Lagerfeld.
She made her breakthrough in 1962 with the so-called Poor Boy Sweater, and went on to create clothes that oozed sophisticated laid-back chic.
But the company has struggled in recent years.
“Management is concerned that suppliers might stop working for us,” if they learn of the parlous state of the firm’s finances, the company source said, adding that all Sonia by Sonia Rykiel shops and children’s boutiques are to be closed.
The source said the atmosphere in the firm was “catastrophic” and blamed management for the current state of what for decades has been a prestigious player on the world fashion scene.
Sources in Sonia Rykiel had warned that up to half of all staff would be let go, but in the end the company decided on keeping redundancies to about a quarter of employees.
