French lingerie brand Lejaby has been placed into judicial receivership by a French court after cash flow difficulties caused the company to apply for a receivership procedure at the end of last month.
According to a statement issued by Lejaby, the receivership procedure will allow the company to reorganise its business to ensure salary payments for all employees.
The statement said: “Judicial receivership initiates an observation period of six months in which the company, with the assistance of the judicial receiver designated by the commercial court, should apply resources so as to ensure continuity of the business and preparation of a rehabilitation plan to be submitted to the court.”
As such Lejaby has confirmed that it will be able to continue to satisfy the needs of its customers during this period and that operations will continue as normal.
In an official statement, Raymond Mahé chairman of Lejaby said: “Faced by the company’s current situation, I have decided to honour the company’s staff commitments, notably with regard to payment of salaries, and to ensure the continuity of the business in order to meet the needs of our customers.”
Lejaby, whose customers in the UK include department store group House of Fraser, lingerie etailer Figleaves and selected independent stockists, closed three of its four French production sites at the end of last year, posted a loss of €2.7m (£2.31m) for the 2010/2011 financial year.
According to a source in the lingerie industry, Lejaby had been having problems with its deliveries before applying to be placed in to receivership.
The source told Drapers: “I think they have been struggling logistically for a while and I had heard that they were having delivery issues.”
In August 2010, Lejaby appointed Kathleen Morgan to the role of UK country manager and tasked her with winning back market share for the brand.