Lanvin Group has proved it can grow. Now, the luxury group is looking to prove it can hold its own on the bottom line.
The company, which debuted on the New York Stock Exchange in December, posted a 37 percent increase in revenues for 2022, when the top line tallied 422 million euros and was boosted by the acquisition of Sergio Rossi in July 2021.
On a pro-forma basis, revenues were up 24 percent, with the Lanvin brand leading the way, growing 64 percent to 119.8 million euros. The rest of the portfolio also showed gains with Caruso up 25 percent to 30.8 million euros, St. John ahead 17 percent to 85.9 million euros, Wolford up 15 percent to 125.5 million euros and Rossi gaining 5 percent to 61.9 million euros.
Still, losses for the year widened to 239.8 million euros — a tally that included 84 million euros in costs associated with the special purpose acquisition company merger that got the company to Wall Street. Losses tallied 76.5 million euros in 2021.
But the company said it plans to keep driving growth and improving margins, with an eye toward breaking even next year, in fiscal 2024.
Joann Cheng, chairman and chief executive officer, said in a statement, “We are pleased with the progress we made in 2022. Not only did we achieve record revenues, we also made great strides in improving our cost structure and streamlining our operations. Our progress in 2022 has laid a strong foundation for 2023, and notwithstanding current macroeconomic conditions, we remain optimistic for the current year, especially with the continued resurgence of Greater China.”
On a conference call with analysts, Cheng underscored the importance of the Chinese market, where traffic has come back “step by step,” and the Chinese shopper generally.
“We still believe that China will be one of the most important markets for the luxury industry and no matter whether it’s a domestic shopper or shopping in the overseas market, it has been a very strong foundation of a customer group for luxury,” the CEO said. “It’s also very important for Lanvin Group to best utilize our ecosystem … and also find more synergies across the brands to get more penetration into Asian markets and the greater China market.”
Sales last year grew 39 percent in Europe, the Middle East and Africa, while North America expanded by 36 percent and Greater China grew by 15 percent even as it was restrained by strict COVID-19 controls for much of the year.
Cheng has been steadily building the group, bringing the brands together and updating where necessary.
The company said one of the main drivers last year was “the refocus of brand strategies and optimization of product categories and mix. New product lines and categories, collaborations and a focus on accessories all impacted the growth and margins.”
Lanvin Group is also working to sharpen its online presence, drawing younger shoppers digitally and establishing a shared digital platform for its brands with Shopify in North America.
And the store network was refreshed with 49 stores closed and 47 new doors opened last year.
“Improved store strategies implemented in 2022 have improved the unit economics, with the group’s whole network of retail doors achieving double-digit growth on a like-for-like basis,” the company said.
David Chan, executive president and interim chief financial officer, told analysts that the company still has work to do matching its cost structure to its size, but that many of the basic steps have been taken.
“We are not faced with reinventing a wheel but rather establishing fundamentals while pushing growth,” Chan said. “We have established a strong foundation over the past year … [and] we have taken steps to streamline our cost structure without sacrificing growth in our brand awareness and revenues.”
He said many of the “nuts and bolts initiatives” that were started last year will reach completion this year.
The brands are also being updated. Last week, WWD reported that Bruno Sialelli was leaving as creative director of Lanvin after four years with the house, which is creating a Lanvin Lab to bring in rising international talents for “creative partnerships.”
Siddhartha Shukla, the Lanvin brand’s deputy general manager, told analysts: “There’s an important, a great opportunity to flex the muscle of the brand in order to speak trans-generationally, trans-geographically across customer profiles. Lanvin Lab will leverage the success we’ve had with the new generation of customers, but I think it plays nicely into what we’re also working on, which is … the reinforcement of Lanvin of being Francis’s oldest couture house and really a beacon for the elegance of French fashion.”