Club 21, the brand's global licensee for ready-to-wear and accessories since 2003, announced yesterday that it had reluctantly "taken the decision not to invest further in its relationship with Luella Bartley Limited." "This is a very disappointing situation for everyone involved with the brand," Bartley said. "I very much appreciate the support that [Club 21 subsidiary] VSQ has given me, but it is upsetting not to be able to protect jobs in this difficult economic climate. We have a number of options open to us, and are considering these over the coming months."

It was reported in June 2009 that Bartley was considering ending her contract with Club 21, but industry insiders assumed a new backer would be found before the relationship was dissolved.

The statement added that due to the unexpected closure last month of the brand's key ready-to-wear producer Carla Carini, spring 2010 orders could not be fulfilled. Luella's turnover is currently in the region of 9 million pounds under Club 21, which also distributes Emporio Armani and Giorgio Armani.

It is a shock to those who have followed the progress of Bartley, Designer of the Year at the British Fashion Awards in 2008. On Monday night, it was still business as usual: she hosted a party at the London store Liberty, where she has designed the Christmas grotto and window display.

"This is a very disappointing situation for everyone involved," she said yesterday. "I have had an incredible team around me... and it is upsetting not to be able to protect jobs in this difficult economic climate."

Known for its idiosyncratic and humorous mix of punk details and party dresses, Luella is the label of choice for the streetwise British girl-about-town and is regularly worn by London gossip-page royalty Alexa Chung, Lily Allen and the Geldof sisters. The designer once described her look as "the kind of clothes you can get drunk and fall over in".