INTERVIEW-UPDATE 1-Escada CEO says bond swap will be close call

* CEO says feedback for new bond offer positive

* Says may apply for state aid if bond swap successful

* Demand for new collection better than expected

(Adds quotes, detail on bond exchange, state aid, shares)

By Eva Kuehnen BERLIN, July 2 (Reuters) - The Chief Executive of German luxury fashion house Escada (ESCG.DE) said feedback for a crucial bond exchange to ensure the company's financial viability was mainly positive, but its success was uncertain.

Escada's future is entirely at the mercy of bondholders who have been asked to forego more than half of their investments as part of a rescue plan to avoid insolvency as early as August.

"Everything depends on this bond exchange," CEO Bruno Saelzer said in an interview on Thursday, on the sidelines of the Berlin Fashion Week.

The tender period to exchange the 200 million euro ($282.2 million) bond started on Monday and Saelzer said feedback was mainly positive. "But it will still be a close call," he added.

Escada -- known for draping stars like Christy Turlington and Katie Holmes -- needs an 80 percent approval rate to launch the next step of its rescue plan, an almost 30 million euro capital hike.

If the German fashion house manages to pull of its plan to cut debt -- 187.6 million euros as of the end of April -- raise cash and set up further credit lines, it will be financially secure to the end of 2010, Saelzer said.

Saelzer said he would then also consider applying for state aid to secure long-term growth but could not do so without first completing the bond swap as the company would not meet the various programmes' criteria.

"We have already looked into it," he said.

Escada shares, which dropped out of Germany's small-cap index .SDAX last month, were up 0.78 percent at 1320 GMT.

FALLEN ANGEL

Saelzer said demand for Escada's latest collection was stronger than expected, but the spring/summer 2010 collection may never hit the shelves. In recent years, Escada has been struggling to sell its clothes, which some have labelled old fashioned and the current global recession has compounded the difficulties.