The luxury label, best known for its brightly hued floral designs, is being sold by Salvatore Ferragamo, the Italian footwear firm, for an undisclosed price. Ungaro’s resident designer, Vincent Darre, will be dumped in favour of a designer with fresh vision, whose identity has not yet been decided on.

Ungaro has fallen on hard times, running up €21 million (£14 million) in losses last year on revenues of €30 million, according to reports in the textile trade. It is the second loss-making French couture brand to surrender to America this year, following the disposal in January of Christian Lacroix to Falic, a Miami-based duty-free retailer.

Ferragamo, which acquired Ungaro in 1996, has been looking for a way out of the high-cost and low-profit world of haute couture and Ungaro has found an unexpected benefactor in the form of a California-based venture captialist.

Born in Karachi, 42-year old Asim Abdullah made his fortune from hi-tech investments, notably the sale of his company Veo Systems, to Commerce One, the business-to-business internet marketplace.

He made $300 million (£171 million) from the flotation of Commerce One in 2001 and bought himself a $15 million mansion on Pebble Beach, a highly sought-after piece of California real estate, only to see it burned down by arsonists two years later. Last summer, the entrepreneur was spotted in Paris at Ungaro’s fashion show, the first clue that the Silicon valley millionaire was to become a fashion sugar daddy.

“Emanuel Ungaro is a great brand with a very rich and unparalleled history,” Mr Abdullah said yesterday. Once a by-word for elegance among a select breed of women with too many hours to kill and too much cash to spend, Ungaro is suffering in a world where cheap is chic. Last year, the designers finally threw in the towel, shutting the door on the haute couture business.

“We stopped making collections, we thought that the concept of couture was not appropriate to the epoch,” said an Ungaro spokeswoman, explaining that few women have the time for the frequent fittings needed in making couture garments. “It is really tailoring from A to Z. Women today want something more easy.”

Mr Ungaro, the founder who is 72, is no longer involved with the firm and gave up designing the ready-to-wear collection several years ago. Attempts to create a more racy, youth-oriented style have not been totally successful, but the fashion house still hopes to raise its gross licensing revenues from €70 million to €100 million in three years.

Ferragamo yesterday expressed hopes that the new owner would provide the tender loving care needed to support the revival of the brand, its once celebrated couture collection. “We believe Asim Abdullah has the knowedge, the credibility and the determination to make this happen,” said Leonardo Ferragamo, director.

Couture catwalk loses its allure

IN THE world of haute couture, 2005 will be remembered with dread — a year when losses mounted, designers were sacked and champagne lost its sparkle, diluted with the tears of ruined careers.

Bernard Arnault, the luxury goods tycoon, finally lost patience with Christian Lacroix. The maker of posh frocks ran up a never-ending stream of red ink since LVMH, Arnault’s vehicle, acquired it in 1987.

In the same month that Lacroix was shuffled off to America, Prada cut its links with both Helmut Lang and Jil Sander, reckoning that supporting the individuals was too great an extravagance for the two loss-making eponymous brands.

Couture has lost its allure for rich young women who would rather shop in Camden Lock than the Rue Montaigne. Fashion houses Givenchy, Ungaro and Versace stayed away from the catwalk this year, and Jean-Paul Gaultier cut off a fifth of his staff.

Explore Industry Sectors

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• B&B shareholders forced into funding rescue
• John Lewis department store sales plunge 8.3%
• Families turn to credit to cover mortgage bills