Italian design house is handed a lifeline

The crisis facing the Italian fashion industry has been laid bare as the owner of design house Gianfranco Ferré was granted bankruptcy protection.

IT Holding has been given a lifeline by the Italian government as the downturn hit profits. Its collapse puts 1700 jobs at risk in the sector, including seamsters, fabric suppliers and couturiers. The company has missed loan payments and failed to pay suppliers for up to a year.

The move comes two weeks after it sought protection for its subsidiary, Ittierre, which makes jeans and accessories for fashion houses including Versace.

Government minister Claudio Scajola said he would outline the first measures to prop up the fashion industry by mid-March. The sector, which employs 800, 000 people in 30,000 companies, has been calling for state aid.

Designer Roberto Cavalli had to cancel a show at Milan fashion week, and blamed the crisis at Ittierre which holds the licence for his younger label, Just Cavalli.