The talented Adrover has been struggling for some time as his financial backer, which was originally the Pegasus group, floundered. Despite this, the designer still managed to show an inventive spring 2002 collection, in whose program notes he thanked attendees for "not losing the faith and sensitivity through a most challenging time for us all."

No one at that show the night of September 9, however, had any idea how much more challenging the times would become. Adrover's new collection, which featured beautiful Flamenco dresses, baggy Turkish pants and Jamaican porkpie hats, will now not be produced.

Though an Adrover spokeswoman acknowledged that problems at the house had been "a bit ongoing," she said the staff only received the official word yesterday. About a dozen employees will be let go.

Last May, the Pegasus Apparel Group, formed in March 2000, changed its name to the Leiber Group in honor of its only successful division. The conglomerate that boasted it would become America's LVMH already had majority stakes in minor but strong names like Pamela Dennis and Daryl K when Miguel Adrover joined the group in August 2000.

Many in the industry were skeptical of Pegasus's grand plans. It seemed implausible that Pegasus would be able to reach its estimated revenues of $400 million in two years from 10 brands. In August 2000 FWD reported that "it remains to be seen whether Adrover is living the ultimate designer's dream, or a version of the Boo.com nightmare."

And as it turns out, in the past year, the Leiber Group and its fashion businesses began falling apart at the seams. It severed ties with Pamela Dennis last spring, stopped the production of Daryl K's collections in April and split from accessories designer Angela Amiri.

Leiber Group president Susan Sokol said in her statement on the Adrover shutdown that "given current economic realities, it makes sense to look for a production partner or strategic buyer who, leveraging off what we have accomplished, can provide the global resources and manufacturing efficiencies to further expand the business." Miguel Adrover was the only fashion business that the group still owned.

This latest move is another part of the Leiber Group's major shift in business strategy. It is now focusing on established brands, recognizing that it just can't afford the costs associated with nurturing and growing new talent like Adrover.

Adrover is certainly a classic rags-to-riches tale. The son of a Majorcan almond farmer, the designer was living in a windowless East Village basement space with $15 in the bank one moment, residing in a swanky Bowery apartment and driving a Pegasus-provided Jaguar the next. Anna Wintour in the front row of his fashion show and the threat of a trademark infringement lawsuit from Burberry in February 2000 changed it all. His break-though collection for fall 2001 electrified New York fashion week with its "garbage chic" clothes fashioned from old mattress covers and other trashcan finds. A year later, a frustrated Wintour walked out of Adrover's jam-packed show because "the crush was so great with everyone pressing forward."

After his first big league, Pegasus-funded show last September, Adrover won the CFDA's award for new women's wear designer. His spring 2001 collection had an emphasis on the military with its fatigues and cadet jackets. The unfortunately-timed fall line on racks now is his most Mideastern in flavor, inspired by a six-week sojourn in Egypt. It features beautiful harem pants, sweeping caftans and layered tunics, but will not likely be a big seller in the current climate.

However, the talented designer remains upbeat. He said in a statement, "My biggest concern at this moment is what's in the best interests of the greatest team of people I could ever work with. While it's not an easy time, I look forward to exploring new possibilities."