In the last decade Lakis Gavalas had been celebrated as "fashion icon", "king of lifestyle" or "guru of fashion" in the Greek fashion market.
Lakis Gavalas S.A., is an exclusive importer and distributor of brand name clothing, accessories, leather goods, shoes, lingerie, fragrances, jewelry, home furnishings and lighting. Included in their impressive list of brands are 60 of the most popular fashion brands in the world.
However, at the end of 2010 Tax inspectors found out that Gavalas had failed to pay Value Added Tax for the time Jan – Oct 2010 and fined him with 5 million euros.
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. According to capital.gr, the company had a turnover of 69.32 million euros in 2009, 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. 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.
Gavalas tried to sell his company premises in Peania that occupy 23,000 m² for 40 million euros but there has been no interest in the offer. The company is working with over 300 retail sales offices and employs over 200 people.
Some of the famous brands have already been transferred to other agencies (Moschino and DSquared to Gruppo Pagoni, Tortuga to Fashion Lobby, while Burberry and D&G are distributed directly to the retailers).
