Paris - Iconic Paris fashion house Christian Lacroix, one of the country's most prestigious, on Thursday declared insolvency after falling foul of the global crisis.

Acquired from the world's leading luxury giant LVMH in 2005 by US duty free giant Falic, Christian Lacroix SNC said in a statement it had declared insolvency before a Paris court due to "the sharp downturn of the luxury market."

The company "has filed a voluntary petition with the Tribunal de Commerce de Paris to put itself under the protection of the courts" but intends "to present a continuation plan" and "to maintain its business operations throughout the proceedings."

Declaring insolvency is a first step towards bankruptcy protection.

A company spokesperson said the court would hand down a decision within a week. Lacroix, 58, was unavailable for comment.

Celebrated for his exuberant swathes of lace and embroidery, and patchworks of fabrics in vibrant colours, Lacroix hit the catwalks over 20 years ago with dramatic designs inspired by the costumes of his native Arles in the south of France, and the Camargue, with its gypsies and bullfighters.

But sales have failed to match the excitement generated by each of his collections and Thursday's announcement is a strong setback for the couture house set up with the backing of LVMH's powerful Bernard Arnault in 1987.

Ready-to-wear lines followed in 1988 and over the years, accessories, furnishings, jeans, tablewear, perfume, and children's clothes.

And for three years from 2002, Christian Lacroix was hired to inject some new fizz and sparkle into Italian label Pucci, also part of the LVMH stable, recreating the iconic prints favoured by the Riviera jet set in the 1960s.

But this creative frenzy did not bring in the hoped-for profits and after ever more hectic changes of chief executive, 11 in all, in 2005 LVMH sold the house to Falic, with Lacroix staying on as artistic director.

Many of the diffusion lines were quietly dropped.

After the 2005 buy-out, the company launched "an ambitious and costly restructuring plan to reposition the brand offering to higher end collections," it said Thursday, including the opening of two US stores, one in Las Vegas, one in New York.