Of the revelations that have come to light with the news of fashion designer L’Wren Scott’s death, perhaps the most surprising are the details surrounding the state of her company, LS Fashion Limited.
Scott owed creditors more than $7 million, according to reports by the Daily Mail and the New York Daily News. The situation had become so dire that she could not pay her staff or suppliers. Scott blamed her absence from London Fashion Week on production problems. It’s now thought that the reason she didn’t show was because she couldn’t afford it.
The Mail reported:
The latest accounts for her business, filed in the UK in October 2013, show that the company, LS Fashion LTD, had a deficit of almost $6 million, with the designer owing creditors $7.6 million.
However, in recent years, her company’s debts had doubled year-on-year – a downward spiral that showed no sign of stopping. In 2009, the debt stood at about $2.1 million and by 2010 it had grown to $3 million.
Scott enjoyed a high profile because her unique wares appeared on all sorts of celebrities: Madonna, Ellen Barkin, who was also a close friend, Christina Hendricks, Nicole Kidman, Amy Adams, even first lady Michelle Obama. But that didn’t necessarily translate into sales for her off-the-rack dresses, often priced northward of $1,500.
Why would she refuse help so steadfastly when she had a seemingly obvious parachute in Mick Jagger, her partner of 13 years? The Rolling Stones frontman has an estimated net worth of $305 million.
The Daily News says “Scott was the sort of person who hated asking for help.”
Many designers have lost control over their own names and reputations when the eponymous companies they started have to be rescued by investors who take a majority share. Racked has a list of 10 designers who lost the rights to their names including Doo-Ri Chung (Doo.Ri) and Roy Halston Frowick (Halston).
Such disasters make for design school cautionary tales. Veronica Marché Miller, a graduate student in fashion at Drexel University, recalled the time Wall Street Journal style columnist Christina Binkley spoke to a group of students. Binkley warned against eponymous companies.
“The general gist is that it’s very tempting to start a line under your own name, because… it’s your own line!” Miller said in an online chat. “But fashion is suuuuuch a risky and expensive business, and you can find yourself giving up the rights to your own name if you’re not careful.”
Kari Sigerson and Miranda Morrison were a classic example of financial backing gone wrong. Their story was chronicled in the New York Times:
It is a dramatic fall for the partners who, not long ago, seemed to embody every young designer’s dream. After building a cult shoe label from scratch, they found a big backer, Marc Fisher, the scion of the 9 West discount-shoe fortune, who they thought could take them to the stratosphere. But instead of turning Sigerson Morrison into the next Manolo Blahnik or Jimmy Choo, the deal went sour. Very sour.
Not only have the women lost their company and even the right to use their names, but they have also been sued for almost $2 million by their former angel. Theirs is a story that may dissuade other young designers from seeking financial saviors.
So common is the story, it was the plot line for Victory Ford (played by Lindsay Price), a character from “Lipstick Jungle,” a show based on the book by “Sex and the City” creator Candace Bushnell. It aired during the writers’ strike of 2007-2008.
Ford had a rich, successful, famous boyfriend, Joe Bennett (Andrew McCarthy) who had the means to save her company. She refused his money, and eventually had to let go of most of her staff and close her shop. She was sewing dresses out of her house with the help of an assistant. Ford eventually got her happy ending by allowing Bennett to rescue her.
There is a trade-off: backers allow you to continue working, but you can end up ceding a little, or a lot, of creative control.
There’s nothing to suggest that Jagger, who Binkley characterized as “smitten,” would have told Scott how to run her business. But it’s well-known that she wanted to establish her bona fides and avoid dismissal as another “celebrity designer.”