DONALD TRUMP knew Asprey was in trouble the day the royal jeweller changed its bags.

“They used to have the most beautiful bags in the world,” he said. “Those dark-purple bags were the best I’d seen. Then they changed them for that dull colour they use now and I asked them why. ‘We know what we’re doing,’ they said.”

Last week, the 225-year-old jewellery firm was forced to pull out of a $1m-a-month lease at Trump Tower as its investors sold out, having lost close to $500m.

The company once had a thriving business in Trump’s Manhattan palace. But over the past two years that business, like Asprey’s fortunes, stopped sparkling.

On the surface, Asprey seemed to have changed with the times. Once seen as a dowdy brand in need of a facelift, the company brought in Jade Jagger, Mick’s daughter, as chief designer at sister company Garrard, and newly minted Hollywood favourite Keira Knightley as Asprey’s official face. Its flagship London and New York stores have been given dramatic makeovers.

But insiders said the company seemed more interested in renovating its property than its products.

Fashionable London telephones have been ringing for weeks with rumours that Asprey was about to bite the dust. Jagger had allegedly told friends the company was in dire straits. Rumours of a rift between Asprey and Knightley spread after the star showed up for the Oscars in a $12m necklace made by Asprey’s arch-rival Bulgari. Last week the phones started ringing off the hook.

Executives from Asprey’s parent, A&G Group, were at the London club Home House last Tuesday for a meeting of British luxury-goods companies.

As executives from Burberry, Rolls-Royce and others rubbed shoulders, the Asprey executives assured people that a money-saving deal was close.

Now the deal has been done. After 18 months of negotiations, Sciens Capital, a New York private-equity firm, and the American hedge fund Plainfield Asset Management, have agreed to invest $80m-$100m in the loss-making group.

Under the deal the company’s debts appear to have gone but its future is still unclear. On Friday there were rumours that Garrard was being sold. Gianluca Brozetti, chief executive, said the renamed holding company, Asprey International, was debt-free and had the support of HSBC, its largest creditor.

He also confirmed Asprey would be leaving its New York flagship — 30,000 sq ft over three floors in Trump Tower. The exit is expected to cost $25m on top of the $60m Asprey spent fixing up the store.

Asprey is said to have a debt pile that tops £30m, mainly owed to HSBC, and a pension fund deficit of about £20m. In the year to March 2004, the latest period for which figures are available, group sales were £18.2m, albeit at a time when two of its flagship stores were closed for refurbishment, while pre-tax losses were about £10m.

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