Apax Partners, the London-based private equity firm, has abandoned its bid to take a stake in Escada AG, the embattled German fashion company. Citing deteriorating market conditions, Apax stated that
"the recent evolution of the stock price and the weakness of the international financial market do not give a basis for pursuing the project."
This is absolutely the right decision. Not only has Escada become somewhat of an industry basket-case in recent years, on Wednesday the company also revised its earnings projections for year ending October 31 downwards yet again. EBITDA margins are expected to fall by about 25% compared to 2007. The company cited recessionary conditions in the USA and other key markets as the reason behind the revisions. Escada's shares fell by 10.8% on Wednesday to 14.35 euros.