2 days ago
- Business
- Business of Fashion
LuisaViaRoma Files for Court Protection Amid Deepening Financial Strain
LuisaViaRoma has filed for court protection from creditors as it undertakes financial restructuring, according to a letter sent by the luxury retailer to vendors and reviewed by The Business of Fashion.
Under Italian law, companies in financial distress can file for court protection from creditors, some of whom may be threatening legal action over unpaid invoices, similar to a Chapter 11 filing in the US. Gianvito Rossi and Moschino Kids are among LuisaViaRoma's vendors who have filed legal debt collection orders, according to documents included in the Florence-based retailer's letter. The Court of Florence has scheduled a hearing for LuisaViaRoma's request for Aug. 27.
LuisaViaRoma said it has over 1,250 creditors, some of which have been chasing payment for months. One American label confirmed it has not been paid by LuisaViaRoma since delivering its last purchase order in April. The label received a letter from LuisaViaRoma in late April that promised a new payment schedule to be announced in May, but this did not materialise.
'For some brands, being owed $60,000 can lead to bankruptcy,' said the sales agent of another label stocked at LuisaViaRoma that has not been paid since March.
LuisaViaRoma joins a growing list of retailers struggling financially as luxury spending decelerates. In June, Saks Global reached an agreement with bondholders for $600 million in new debt, which prompted the credit rating agency S&P to downgrade the company's status and called the refinancing akin to a default. In February, Saks announced contentious new payment terms that pushed some brand partners away.
Founded as a boutique in Florence in 1930, LuisaViaRoma emerged as one of the major luxury e-commerce players in Europe in recent years, with seven brick-and-mortar locations in Italy and one in New York operated by a subsidiary that opened last year. Long owned by the Panconesi family, it received a minority investment from Milan private equity firm Style Capital 2021.
In the first quarter of 2025, LuisaViaRoma's sales fell 13 percent year-over-year, according to the documents reviewed by BoF. In April and May, sales contracted by more than 30 percent. In June, the retailer reduced its corporate headcount by 20 percent, or 70 roles. Around the same time, it named board member Angelo Rodolfi as chief restructuring officer.
Last month, LuisaViaRoma announced the closure of its Milan office, citing a reorganisation strategy in order to streamline the business. In an interview with Women's Wear Daily published July 19, LuisaViaRoma chief executive Tommaso Maria Andorlini said the company was not seeking court mediation regarding creditor negotiations.
But behind the scenes, the retailer had already sought confirmation of protections under Italian insolvency law. On July 16, LuisaViaRoma submitted an application to the Tribunal of Florence, seeking a 120-day reprieve from legal action by its vendors and financial creditors, including its main creditor UniCredit S.p.A., with whom it has a €25 million financing agreement that expired on July 21.
LuisaViaRoma did not respond to a request for comment. A Struggling Business
Citing 'temporary economic and financial imbalance,' LuisaViaRoma pointed to the declining luxury fashion market at large as well as US tariffs and other rising costs, such as transportation. It also outlined a number of internal missteps, including pursuing unsustainable growth. An overinvestment in inventory purchases, meanwhile, led to higher management costs and lowered margins.
'The company is now oversized and overly rigid,' it said in the July 16 filing. 'The company has incurred losses and developed a situation of financial tension, leading to overdue payables to suppliers. In turn, suppliers slowed deliveries and shortened payment terms.'
Nonetheless, LuisaViaRoma has a comprehensive plan for recovery, as outlined in its request for court protection. In order to boost margins, the retailer will expand its private labels, Annagreta and The Core, which commands higher margins than third-party brands, and launch a new marketplace model that will 'unify the fragmented landscape of Italian luxury fashion distribution,' with partnerships already lined up with independent e-commerce sites Camera Buyer Italia and
Additionally, LuisaViaRoma will shutter at least two stores and reduce exposure to less-profitable markets, including the US. Other cost-cutting measures include scaling back from three warehouses to just one and renegotiating payment terms with vendors.
