FRANKFURT, June 19 (Reuters) - Stricken luxury fashion house Escada ESCG.DE needs the support of both its bondholders and owners to survive the coming weeks, a source with knowledge of the situation told Reuters.
However, the source said that rescue of the company, whose gowns are worn by Hollywood stars such as Katie Holmes, may take longer than initially planned despite earlier warnings that it may go bust as soon as next month. [ID:nLS792224]
Escada has been struggling with falling sales as recession compounds difficulties it is having selling its clothes, which some have labelled old-fashioned.
To survive, Escade needs to raise fresh capital, cut debt and secure new loans, but it looks now like all this could drag on until the beginning of August, the source said.
Escada was already in talks with all parties involved to secure operations in the interim, the source added.
An Escada spokesman declined to comment.
Reporting by Eva Kuehnen in Frankfurt and Christian Kraemer in Munich