CBSN

Italy's Fashion Industry In Peril

Models wear creations as part of the Giorgio Armani Fall/Winter 2009/2010 fashion collection, presented in Milan, Italy, Friday, Feb. 27, 2009. (AP Photo/Luca Bruno)
CBS
The IT Holding company, which owns the Gianfranco Ferre fashion house, sought bankruptcy protection from its creditors Thursday.

The move comes just two weeks after the holding company put one of its subsidiaries into bankruptcy protection. Ittierre, which has licenses to produce Versace Sport and Just Cavalli among others, filed for protection from its creditors Feb. 9 after banks refused to inject the necessary capital to keep going.

IT Holding bought the Gianfranco Ferre Fashion House in 2002.

When owner Gianfranco Ferre died in July 2007, the fact he had sold to IT Holding earlier was greeted as a point of continuity for the fashion house, even as it searched for new creative talent.

The Ferre women's collection for next fall and winter is to be shown in Milan on Friday, as scheduled.

Industry Minister Claudio Scajola on Thursday said he would announce the first measures by mid-March to support Italy's fashion industry, which has been suffering as the world financial crisis deflates consumer spending.

Scajola made the announcement after meeting with members of the fashion and textile industry, which is central to Italy's attempts to promote its craftmanship both at home and abroad.

Italy's fashion and textile industry employs 800,000 workers in 30,000 companies, the Industry Ministry noted in a statement.

IT Holding's failure would risk 1,700 jobs in Italy's critical fashion industry, which in 2008 had revenues of nearly $68.71 billion. Unions have warned that the industry also could face job losses as the impact of the global financial crisis widens.

Under Italian bankruptcy procedures, Scajola must name a bankruptcy administrator to come up with a plan to steer the company back to financial health.

By COLLEEN BARRY