Max Azria cede control of Guggenheim Partners

       Max Azria Employees say it is a bad morning, when the fashion designer always has his sunglasses on, when he in the work. There may be many in the coming days.

The chain-smoking, Tunisia-born designer is in the final stages of hammering an agreement that will ease the debt burden of the company, but will probably cost him control of the fashion house he took a quarter century to build.

The talks are likely the investment firm Guggenheim Partners LLC, which owns about $ 475 million of BCBG Max Azria Group Inc. nearly $ 685 million in debt with a majority stake in the company, people familiar with the talks told to leave.

Mr. Azria is to remain in an advisory role, perhaps as president, and receive a "significant amount" of equity, if the conditions are not completed, and Mr. Azria may have other options to other people familiar with the talks said. An agreement in the coming weeks could be achieved, the people said.

Guggenheim said he assigned an investment in BCBG with a new class of preferred shares. Mr. Azria was a list of questions about this article by e-mail, but declined to comment.

Mr. Azria have strappy dresses for celebrities such as Kim Kardashian and Selena Gomez with his colorful personality and lavish lifestyle it a presence in the fashion world for over two decades. But BCBG, which he founded in 1989, was to develop highly indebted left after unsuccessful trials.

The negotiations to reduce the debt to highlight the dilemma investors in many companies fashion glossy: The creative genius, the house may not run on the skills to run a business in modern clothes, but his departure would risk damage to the brand .

The dilemma has become even more urgent, given the rapid changes that are transforming the once clubby world of fashion. To be successful, brands Global Tech have been warned and have the ability to communicate well with Wall Street skills are often not strong suits for the fashion gurus.

"It's more complex environment that the industry is facing," said Arnold Aronson, general manager of retail strategies at consulting firm Kurt Salmon Associates. "No one is big enough to have a comprehensive understanding of all these problems."

The clock is ticking on BCBG closely held, hired the investment bank Blackstone Group LP BX +0.87%, and the law firm Skadden, Arps, Slate, Meagher & Flom LLP, to advise the company on its restructuring clothing.

About a third of the debt BCBG mature in each of the three years from 2014 after Standard & Poor's, which assesses the debt deep into what. Called the land of junk food Guggenheim Partners, whose CEO recently three other investors to buy the baseball team the Los Angeles Dodgers, has first privilege of the company and second loans, according to a person familiar with the discussions. Guggenheim is advised by the law firm Weil, Gotshal & Manges LLP.

BCBG is on the block for at least the last year and held talks with private equity firms TPG and Sycamore Partners in this year have been, said people familiar with the situation.

Mr. Azria has courted a reputation for tough negotiator and he sometimes upset the financial. When a banker asked to smoke during a meeting in Los Angeles BCBG headquarters, refrain from discussing the financing for several years, Mr. Azria ignored and began to light a cigarette after the other, according to a person who gave it.

Now at the age of 64, Mr. Azria began designing clothes in the early 20s, after he moved to Paris from Tunisia. Later, he moved to Los Angeles-based BCBG send link Paris term bon, bon genre, which means "good style, good attitude." The company has since grown to a half-dozen brands are the 500 retail stores.

Mr. Azria BCBG went as a family, the people who worked with him. He met his second wife, Lubov, when they occurred in 1991 in the company as an associate designer. She is now creative director. Her daughter Joyce, from a previous marriage, also works for the company.

On Friday evening, Mr. Azria would someone working late in his Beverly Hills, California, home for Shabbat dinner invite, the former employee said. He has been a manor house dating from the 1930s, Holmby Hills Los Angeles, he moved bought the author and producer Sidney Sheldon. Tens of thousands of crystals along the front door hung, and the house has a Moroccan house pool and a Japanese garden, according to a person who has it.

Over the years, he began new rows based on the brand BCBG, BCBGeneration including low online prices called for younger customers. He has developed exclusive lines for large retailers such as Wal-Mart Stores Inc. WMT 0.00% -0.98% and CA.FR Carrefour SA. And it has made acquisitions including Max Rave chain teen-oriented 488-unit and the French brand Herve Leger and Manoukian.

To pay company, Mr. Azria, loans, and if these loans came due, he refinanced more debt, often trusts at a higher price, according to people familiar with the situation. If some of the new company BCBG was pulverized forced to repair a growing pile of debt with lower incomes.

A spokesman said the company BCBG has managed its capital structure on the appropriate market rate.

A 2009 agreement, Wal-Mart to sell clothes by Mr. Azria and singer Miley Cyrus designed fell flat when the line does not connect with young people. Wal-Mart has been selling a small line after it was introduced.

BCBG Max Rave recently closed, who bought the company in 2006 from a unit of Guggenheim Partners. Mr. Azria and struggled to build a U.S. customer for Manoukian, which was acquired in 2005.

While an agreement to solve the financial problems of BCBG seems close, there may be some difficult days of the coming negotiations. Mr. Azria has a reputation as someone who has the angle of an agreement to continue working even after the conditions have been agreed, the people who know him say.