Leica Bankruptcy: The Fall of the Elastic Fiber Empire in the Capital Game

Ask AI · How Capital Mergers Rewrite Destiny from the Glory of Moon Landing to Bankruptcy of Lycra?

The absolute ruler of the global elastane fiber industry, the legendary company Lycra, which accompanied Armstrong to the moon, has recently officially filed for bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas.

This company, with a 68-year history, which invented elastane fibers that made jeans and yoga pants form-fitting, and was legendary for accompanying American astronaut Armstrong to the moon, has ultimately reached the step of bankruptcy reorganization after four years of financial struggles and two creditor takeovers.

From the glory of moon landing space suits to the case number in the Texas Bankruptcy Court, Lycra has traversed the path of rise and fall in 68 years, and whether it can be reborn in the future remains uncertain.

Once Sparked a Fabric Revolution

Lycra’s iconic red hangtag was synonymous with “perfect fit and comfort,” yet it ultimately fell upon the ruins of capital mergers. Its decline can be seen as a complete cycle in the history of a business empire and a profound pain for traditional manufacturing under the pressures of global competition and high-leverage capital operations.

Lycra’s legend began in 1958, when it was successfully developed by chemical giant DuPont. This fiber, which can be stretched to 5-8 times its original length with an almost perfect recovery rate, quickly replaced natural rubber, not only creating entirely new clothing categories like pantyhose, leggings, and activewear but also shining brightly in the 1968 Winter Olympics and the 1969 Apollo moon landing mission.

The emergence of Lycra sparked a fabric revolution. It can be stretched to 5 to 8 times its original length without breaking, with an elasticity recovery rate close to perfect, lightweight and durable. It quickly replaced natural rubber in the lingerie market and spawned new categories like pantyhose, leggings, and activewear.

At the 1968 Winter Olympics, the French ski team wore Lycra blended tight ski suits, achieving great success on the medal board. This type of clothing significantly reduced wind resistance, provided support for muscles, and reduced energy loss caused by vibrations. Subsequently, swimming and cycling events were successively dominated by Lycra.

In 1969, when American astronaut Armstrong stepped onto the lunar surface, the space suit he wore also contained a layer of Lycra fiber, used to secure the cooling water tubes, ensuring thermal exchange efficiency and preventing the astronaut from overheating in the extreme space environment.

DuPont pioneered a unique “ingredient branding” strategy. Lycra was not only sold as a chemical product but also established cooperative relationships with downstream clothing brands through its red wave hangtag. Consumer awareness of the Lycra tag even exceeded that of the clothing brands themselves; a garment with a Lycra tag could command a significant brand premium.

The 1990s marked Lycra’s most glorious period. From aerobics and high-cut bodysuits to neon-colored leggings, Lycra created a fashion aesthetic of “fit, long, and tight silhouettes,” becoming a globally popular cultural identifier. Although the original patent had long expired, Lycra still held over 50% of the global spandex market share.

By establishing “tag partnership relationships” with downstream brands, Lycra successfully achieved “ingredient branding,” allowing consumers to pay a high premium for garments with the red tag, with up to 1.3 billion textile items certified this way each year.

Experiencing Capital Difficulties

However, this profitable sector changed hands multiple times after DuPont’s transformation, and the turning point of its fate occurred in 2019.

In 2019, Chinese textile giant Ruiyi Group acquired Lycra from American Koch Industries for a high price of $2.6 billion, attempting to create a “Chinese version of LVMH” fashion empire encompassing raw materials, fiber R&D, and luxury retail. By then, Ruiyi Group had already included numerous international brands such as SMCP and Bally through a series of cross-border acquisitions, but its financing heavily relied on external loans, with total debt reaching $4.4 billion.

Just three months after the acquisition, Ruiyi Group faced substantial defaults due to a broken capital chain, marking the beginning of a seven-year capital “nightmare.” In June 2022, a Dutch commercial court ruled that Lycra’s equity would be taken over by creditors, with new owners being a consortium composed of Korean private equity group Lindeman Partners, Hong Kong’s Tor Investment Management, and China Everbright.

Despite creditors claiming that Lycra had escaped the financial difficulties of Ruiyi Group, the actual situation continued to deteriorate. The bankruptcy filing documents revealed grim data: Lycra’s capacity utilization rate had plummeted from about 80% in mid-2024 to 60% by the end of 2025; EBITDA was projected to drop from $132 million in 2024 to $44 million in 2026.

The causes of this situation are complex. Firstly, there are historical asset disputes, as Ruiyi Group was accused of transferring Lycra China’s quality assets before losing control, leading to prolonged litigation over a capital contribution dispute of 574 million RMB for the Foshan joint venture, severely damaging its reputation in the core Chinese market, where 29% of Lycra’s revenue in fiscal year 2025 is derived.

More critically, the market environment has undergone dramatic changes. Rising costs of energy and petrochemical raw materials have significantly squeezed profit margins, while competitors in Asian countries like China have massively expanded production, leading to a continuous drop in spandex prices, with generic spandex prices now “close to cash cost levels.”

At the same time, the pandemic-induced supply chain disruptions, high inflation, and a slower-than-expected recovery in European and American markets have worsened Lycra’s situation. In early 2025, creditors attempted to sell the company to another Chinese enterprise to settle debts, but the deal collapsed in August. By early 2026, the over $1.5 billion debt burdened by Lycra was mostly due to mature at the end of March, forcing creditors to initiate “Plan B”—implementing a debt-for-equity swap through the bankruptcy court.

According to the submitted “pre-packaged” bankruptcy reorganization plan, creditors totaling over $1.2 billion agreed to convert their debts into equity or warrants. After the reorganization, Lycra will be controlled by international financial consortia such as Lindeman Asia and Nexus Capital Management, with total debt expected to decrease from $1.53 billion to about $330 million, and leverage returning to a healthy range.

The company promised that the reorganization would not affect production operations, customer deliveries, and employee salaries, with annual savings on interest expenses to be reinvested in R&D and capacity upgrades. However, the elimination of debt cannot automatically restore lost market share, nor erase the scale advantages built by emerging Asian players.

From the glory of moon landing space suits to the case number in the Texas Bankruptcy Court, Lycra has traversed the path of rise and fall in 68 years. The once-representative red wave logo of fashion and technology now hangs on legal documents of bankruptcy reorganization, and whether it can be reborn in the future remains uncertain.

(Author Li Qiang)