FRANKFURT, Nov 3 (Reuters) - Sven Ley, the son of Escada founder Wolfgang Ley, has teamed up with the former head of Gucci, Giacomo Santucci, and Italian investment group Borletti to mount a rescue bid for the German luxury fashion house.

Photo: AFP

Escada (ESCG.DE), once one of the world's top fashion labels, filed for insolvency in August after years of diminishing sales took their toll and a broad restructuring plan failed to win approval from bondholders.

The insolvency administrator has since been looking for a new investor and is now in the final stages of negotiations.

Ley's consortium, ZSL Partners, has offered to pay almost 80 million euros ($118.2 million) for the fashion house, guaranteeing a minimum price of 50 million euros, a person close to the matter told Reuters on Tuesday 3 November.

The consortium said in a statement it aims to boost Escada's sales to more than 500 million euros by 2014 without any major redundancies in Germany, and to bring Santucci on board as chief executive. Santucci has worked for fashion brands like Prada, Gucci and Lang in the past.

Escada reported sales of 151 million euros for the first half of its fiscal year.

The bid was financially backed by a group of wealthy families, the consortium said, without giving names. Borletti, led by Italian businessman Maurizio Borletti, would also lend his support, it added.

The Borletti group said in October it was assisting a bidder for Escada.

Borletti owns the Rinascente and Printemps department stores in Italy and France, which sell fashion items from designers.

Escada said a decision on the final buyer had not been reached yet. It said negotiations were still going on and declined to comment on who the bidders were.

An industry source said four bidders were still in the race, among them Megha Mittal, the daughter-in-law of ArcelorMittal CEO [ARCMT.UL] Lakshmi Mittal. A decision could be made within the next couple of days, the source said.

(Reporting by Eva Kuehnen and Christian Kraemer; Editing by David Cowell)