Ungaro's loss appears to be Kors's gain, as sources speculate that Michael Kors will take over the designer's former store space on Madison and 67th, mere blocks between two of its other stores.
The title of Ungaro's fable would be: The Label that Caught Publicity Fever, Hired Lindsay Lohan to Design its Spring 2010 Collection, then Subsequently got Slammed by Critics and Closed its Madison Avenue Flagship. Or, A Year in the Life of Ungaro.
Madison Avenue Spy heard through the grapevine that Michael Kors will add the Madison Avenue gem to its empire -- the designer already has shops on Madison and 77th and Madison and 60th. The 1,600-square-foot space is a small one in comparison, so the Spy isn't counting on it housing all three Michael by Michael Kors, Kors by Michael Kors and Michael Kors lines (maybe he can simply buy enough real estate to call each of his shops by one letter of his full name and they'll rename Madison something like Avenue by Michael Kors).
The moral of the story seems to be: best to stick to certain supermodels over starlets to boost your fashion cred.