Paris - The French fashion house of Christian Lacroix, considered one of the country's most creative contemporary designers, is near bankruptcy, the daily Le Figaro reported Thursday.

Management of the fashion house said last Friday the business could no longer pay its bills, according to Le Figaro.

A commercial court is to decide next week whether to declare the company bankrupt and liquidate it to pay off its debts.

However, shareholders have said they want to keep the fashion house afloat and will present a rescue plan to the court.

Like many luxury goods businesses, the Lacroix fashion house was severely affected by the recession, losing 10 million euros in 2008 on turnover of 30 million euros.

And business was even worse this year. Sales of Lacroix's ready-to-wear summer collection for women are down 35 per cent. It remains unclear if the next scheduled ready-to-wear fashion show, set for July, will be held.

Company head Nicolas Topiol said the company was particularly suffering from the downturn in the United States and Japan, its two most important markets.

Despite reaping lavish praise for Lacroix's opulent and theatrical creations, the business never made money in its 32-year-history.

That is why French luxury group LVMH sold it in 2005 to the Falic Group, the second-largest US duty-free retailer. The new owners invested heavily in the couture business, running up its debt.

Lacroix, 58, who designed the wedding dress of singer Christina Aguilera, is contractually obligated to continue working for the label that bears his name until next year.(dpa)