FRANKFURT (Reuters) - By snapping up insolvent German fashion house Escada, Megha Mittal, daughter-in-law of steel magnate Lakshmi Mittal, launched the type of corporate coup more associated with her famous namesake.
Megha Mittal — wife of ArcelorMittal finance chief Aditya Mittal — won the bidding war for the German fashion icon on Thursday over rivals including Sven Ley, the son of Escada founder Wolfgang Ley.
The 33-year-old agreed to buy all the key assets of Escada’s operating business, including the brand, for an undisclosed price, leaving the current management surrounding Chief Executive Bruno Saelzer in place.
“There is a chance to restore its old glory,” Escada’s insolvency administrator, Christian Gerloff, said after the deal.
Escada, once one of the world’s top fashion labels, had to file for insolvency in August after years of diminishing sales took their toll and a broad restructuring plan failed to win approval from bondholders.
“Megha always had an eye [for design],” said Alan Hughes, course director and vice principal at London’s Inchbald School of Design, where Mittal completed a one-year diploma in architectural design.
“I think most probably at the back of her mind she wants a design business that would incorporate interiors, fashion, graphics — she has that kind of view that everything is connected,” he added.
Her financial background will come in handy for her latest project. She specialised in finance and strategic management at U.S. alma mater Wharton Business School, where she also met her husband. They got married in 1998 and have two daughters.
After working for her family’s textile business in India, she got a job at Goldman Sachs in investment research in 2000, covering telecom, media and technology stocks. “It wasn’t her passion,” said a person close to her who asked not to be named.
Design, however, was. “Megha was very committed, ambitious and very passionate about design and her Inchbald Diploma,” said Inchbald’s Hughes.
“She wasn’t a copybook straight-A student at all,” Hughes said, describing her as a nose-to-the-grindstone student who wanted to know everything about design, yet struggled at first. “The drawing didn’t come easy,” he said. But Mittal stayed.
“She absolutely showed her mettle and stuck to it when things were very difficult to achieve,” Hughes said. “She worked really hard ... and certainly achieved good results in the end.”
Mittal went on to design office spaces and homes for friends and family. A private jet for which Mittal designed the interior was featured in London-based influential design magazine idfx.
“She changed the whole look of the jet and it was very sophisticated — just what I would expect from Megha in terms of detail. Dotting every i and crossing every t,” said Hughes.
At Escada, Mittal will claim a seat on the supervisory board, shying away from the spotlight, which will be left to current CEO Saelzer.
On Friday morning, however, Mittal stepped into the limelight, addressing Escada workers at an employee meeting. Some had tears in their eyes, a person who was there said.
Saelzer later noted that she was not wearing Escada. “There wasn’t enough time for that,” he said. But Mittal went shopping straight away at the Escada store - complete with staff discount.
Reporting by Eva Kuehnen; additional reporting by Christian Kraemer in Munich; editing by Simon Jessop