From Page Six:
In September, CEO Mounir Moufarrige announced that Lohan had been brought on to provide an "electric shock" to the aging fashion house. The move, widely viewed as a publicity stunt, was so controversial that head designer Esteban Cortazar resigned earlier in the summer rather than work with a celebrity adviser.
Cortazar was proved correct in October, when critics in Paris savaged the collection and Lohan's contributions as a laughingstock. In one of the nicer reviews, WWD noted Lohan's nipple-baring outfits, covered with hearts, were "cheesy and dated . . . an embarrassment."
Now, Page Six has learned that Ungaro's chairman, Asim Abdullah, is locked in a fierce battle with Moufarrige over Lohan's future role at the company.
"Asim wants her out now," a fashion insider who has seen e-mails between the two executives tells Page Six. "Department stores in the States have already told him they won't be picking up the line if Lohan remains a collaborator, so it's a serious issue."
The problem, says our source, is that "Mounir wants to keep her on because it was his idea to hire her in the first place. He's trying to save face."
The terms of Lohan's multiyear contract were not disclosed, though it is said to be worth seven figures.
Earlier this month, Ungaro himself, who hasn't had any contact with the house that bears his name since leaving in 2005, said of Lohan's debut collection, "I am furious, but I can't do anything about it," adding that the label "is in the process of losing its soul."
Reached for comment, a rep for Abdullah said of the rift between the execs, "Such an insinuation is totally absurd."