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The fashion guru Lakis Gavalas goes bankrupt

06 July 2011 / 14:07:57  GRReporter
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The fashion guru of Greece Lakis Gavalas famous for his chain of luxury stores for designer fashion in the country goes bankrupt. Gavalas is the exclusive agent in the country of about 60 of the most popular fashion brands in the world. However, the economic downturn and the tight fiscal control cornered him and at the end of 2010 he was fined five million euros for not paying VAT in the last year. Due to the lack of financial resources to meet his obligations to the state as well as to private lenders Gavalas is forced to resort to paragraph 99 of the Code of bankruptcy whereby the debtor would be protected from his lender, although he seized the payments to them.

Poor financial management and the significant decline in retail sales are the two main reasons for the financial collapse of the importer. Based on data for 2009, the company had a turnover of 69.32 million euros, while in 2008 this amount was 68.6 million euros. The net profit before taxes reached 1.84 million in 2009, which is a significant drop compared to last year when it was 4.4 million. Unfortunately, the star of the brand fashion is not good at accounts apparently, because the total obligations of the company reached 17.37 million euros in 2008, while in 2009 their value jumped to 94.3 million euros. The situation with his other company, Lakis Gavalas - Interiors JSC, which also recorded 5.8 million euros losses in 2009, is not better either.

The real estate of Gavalas’ companies could be his life-saving remedy. The head office and the warehouses of Galavas are located near the capital towards the Athens airport Elevtros Venizelos in the region of Kantza. They occupy 33,000 square meters and according to the information provided in the Greek edition, the entrepreneur tried to sell the business area with the adjacent office buildings, warehouses and logistics centre for 40 million euros through a large real estate agency. But there has been no interest in the offer. Lakis Gavalas started the construction of the offices more than five years ago when there were no clouds in the skies of the Greek economy. Currently, analysts estimate that the investment has proved unprofitable even in the good times of the Greek entrepreneurship and it has significantly contributed to the collapse of the company.

Gavalas’ company is working with over 700 retail sales offices throughout the country and employs over 200 people. It represents brands such as Sonia Rykiel, Burberry, D & G, Moschino, DSquared, Fashion Lobby, Anna Molinari, Kritzia, Trussardi and many others, some of which have already been transferred to other agencies.

Fashion is not Lakis Gavalas’ first choice in life. He was born in 1957 and comes from a wealthy family from Piraeus. His father was the owner of a marble processing factory and the little Apostolakis (this is his real name) is a graduate of the Greek-French School. The designer told for Athens Magazine that his first job was at age of 17 at a furrier who made school bags in the area of ​​Monastiraki. There, he demonstrated his talent in fashion for the first time as he managed to make a few state-of-the-art bags for that time. According to him, these bags were very successful.

He went to Italy as a dancer at the age 20 and started working in the Italian television RAI. He discovered the world of fashion there and became fashion shows choreographer first. His more creative collaboration with Italian designers began when he was 27 and at the age of 29 he returned to Greece with the idea to open a shop on the island of Rhodes, which at that time was still a free zone and all luxury goods would be imported duty free. Later, his commercial network started growing, and then he created his own brand of apparels .LAK, although he does not like to be called a designer. People close to him say he is a very good professional and a workaholic, and hope that he will be able to stand up soon.

Tags: EconomyMarketsLakis GavalasBankruptGreeceParagraph 99
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