L N Mittal's daughter-in-law Megha to acquire fashion house Escada

Megha Mittal, daughter-in-law of steel magnate Lakshmi Mittal, will acquire bankrupt European luxury cloth maker Escada for an undisclosed amount, trumping a joint bid by Sven Ley, the son of Escada founder Wolfgang Ley, the former head of Gucci, Giacomo Santucci, and Italian investment group Borletti.

In a statement issued today, Mittal Family Trusts, which represents Megha Mittal's interests, said it signed an agreement towards this with an insolvency administrator late on Thursday.

"The insolvency administrator of Escada AG has signed a sale and transfer agreement with one of the Mittal Family Trusts," Escada said, adding that the preliminary creditors' committee has approved the transaction.

Under the agreement, Escada AG's business operations, including employees as well as worldwide brand rights, production facilities and the sales and distribution structure to the Trust, Mittal Trust said, adding that the transaction is subject to customary antitrust approvals.

Escada, which specialises in women's fashion apparel and accessories, has 182 outlets and 225 franchise shops spread over 60 countries. The group filed for bankruptcy in August after declining sales pushed it into the red.

Mittal, who has been looking for an investment in the fashion industry for about a year, had also expressed interest in acquiring Italian fashion brand Gianfranco Ferre.