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Lanvin Group revenue increased 6.4 per cent year-on-year to €215 million in the first half of 2023, the company said Wednesday. Improvements in margins and performance across key markets offset declines at its namesake Lanvin brand amid an ongoing transition in its creative management.
Flagship brand Lanvin’s revenue was down by 10.8 per cent to €57 million. The brand is navigating a new creative direction following the departure of Bruno Sialelli, who left in April. In June, American rapper Future was announced as the first guest designer for Lanvin Lab, a new experimental space for creative partnerships with talent that aims to boost the house’s cultural position. Lanvin also plans to hire a new artistic director in the coming months to work alongside the guest designers.
The group expects Lanvin’s performance to improve in the second half with the launch of Lanvin Lab as well as progress with its recently established leather goods and accessories division. Both initiatives are intended to attract younger consumers.
Group losses widened from €68.7 million in the first half of 2022 to €72.2 million this year. However, the group, which also owns Wolford, Sergio Rossi, St John and Caruso, reported gross profit of €125 million, representing a 58.5 gross profit margin — up from €113 million and 55.9 per cent gross profit margin in the first half of 2022.
Improvements were ascribed to “stabilisation of our core operating costs, including cost of sales, marketing and selling expenses and G&A expenses”, CEO and chairman Joann Cheng said in an earnings call. “The progress we have made in optimising our cost structure has created a significant operating leverage to drive profitability as we accelerate our top line growth in the second half.”
The group, in which China’s Fosun Group has a controlling stake, said it expects to “maintain momentum” in the second half of 2023 and continue improving its margins. Strategic priorities for the rest of the year include a focus on topline revenue, rationalising its store networks and stabilising its operating expenses.
This half, the group also completed the acquisition of Lanvin’s Japan trademarks from licensing partner Itochu Corporation in March.
Geographically, the brand is focusing on Greater China and the US. “We’re seizing the opportunity in Greater China with [our] considerable advantage versus our competition via internal expertise, local connectivity and the real agility and speed to market,” said Lanvin deputy general manager Siddhartha Shukla. “In the United States, we’re stabilising what has been remarkable growth over the past few years into a more sustainable business with momentum across all categories and channels.” Greater China grew 13.9 per cent, while the rest of Asia grew 27.1 per cent. EMEA grew 5.3 per cent and North America nudged up by 2.6 per cent.
Shukla also noted the brand is planning more collaborations and VIP partnerships to tap into new customer demographics globally.
The adjusted EBITDA loss for the group increased to €41 million from €36 million in the same period last year, primarily linked to lower revenue at Lanvin as well as investment in Lanvin Lab.
All other brands saw revenue increases — a 22.4 per cent surge at Sergio Rossi, 33.6 per cent at Caruso, 11.3 per cent at St. John and 8.4 per cent at Wolford. In February, the group appointed industry veteran Nao Takekoshi as creative director at Wolford with a brief to modernise the brand. Takekoshi has previously held positions at Issey Miyake, Gucci, Donna Karan, Jil Sander and Calvin Klein.
“We continue our track record of global growth while we make progress on our path to profitability,” said Cheng. “Our improvement in gross profit and contribution profit are evidence of our commitment to securing profitable growth. We have done the groundwork for our brands to accelerate their growth and are excited about our prospects for the remainder of 2023.”
CFO David Chan hinted at future expansion for the group. “On the M&A front, we’re having discussions with several interesting parties,” he said.
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