Mariella Burani Fashion Group has announced its intention to file for bankruptcy protection after failing to secure financing.
The Italian luxury fashion house, which owns brands including Mariella Burani and Mandarina Duck and European retail outlets including Revedi and Do Gil, said in a statement on Saturday that it would ask for protection from creditors and for the company to be put in administration.
Mariella Burani Fashion Group (MBFG) said it thought this would secure the best outcome for creditors and workers because it does not plan to close the business.
The statement, which was sent to Reuters, said: “The MBFG board, after having noted that the company has not received evidence of a binding commitment from partners or third parties … to cover losses [of nearly €71m (£61.6m)] … has deliberated … to go ahead and ask bankruptcy protection.”
Reports in early January predicted that the Mariella Burani Fashion Group would make this announcement, after failing to negotiate funding from 40 banks in late 2009. Its creditors include Deutsche Bank, Bank of China, Cariprato and Barclays Bank.
The future of MBFG has been in question since September when it suspended its shares following deepening losses. The directors have since been attempting to secure a financing deal with its banks.
MBFG is believed to have debts totalling nearly €500m (£433.9m).
According to reports, the banks said they would not agree a refinancing deal until the Burani family could prove it had €50m (£43.4m) available for a capital increase to cover losses, the deadline for which was Friday.