German fashion house Escada has failed to get enough backing for a crucial part of its financial restructuring plans and said it will file for insolvency this week.

Escada failed to reach the 80% approval rate for its bond exchange. Only 46% of bondholders agreed to the swap, which offered them €400 (£344) and 10 Escada shares per €1,000 (£860) of debt. The restructuring was needed to set up future credit lines and allow a planned capital increase to go through.

The tender period for the bond exchange of €200m (£171.9m) expired yesterday.

Escada said in a statement: “As previously communicated … the board of management intends to file for the opening of insolvency proceedings due to imminent illiquidity of Escada AG this week.”

The supervisory board will meet today to discuss the retailer’s next steps.

The bond swap was an essential part of a refinancing plan announced by Escada in April.