The designer Zac Posen is shutting down his eponymous label.

Posen, who has been a red-carpet favourite for almost two decades, is known for glamorous, body-hugging gowns, often with long trains or flamboyant ruffles, for stars including Katie Holmes and Rihanna.

An announcement by the owners, House of Z and Z Spoke, on Friday said the company could no longer continue operations. It had been in a sale process.

Posen, 39, said he was “deeply saddened that the journey of nearly 20 years has come to an end”. He launched his label in 2001.

“The management team … worked extremely hard to navigate the increasingly challenging fashion and retail landscape,” he said in a statement. “We are disappointed that these efforts have not been successful and deeply saddened that the journey of nearly 20 years has come to an end.

“I am grateful to the team who lent their incomparable talent and commitment along the way. I remain incredibly proud of what we created and hopeful for the future.”

Posen also serves as creative director for the Brooks Brothers women’s collection.

His prominent designs include a mermaid-like gown for Gwyneth Paltrow at the 2007 Oscars, an off-the-shoulder gown with brightly sequinned skirt for Oprah Winfrey at the 2011 Oscars, and a fitted pink satin gown for Rihanna at the 2014 Diamond Ball.