EXCLUSIVE: Lanvin Group Lowers Valuation Ahead of December IPO
SHANGHAI — Ahead of its December IPO, Lanvin Group revealed its 2022 interim results and an updated company valuation in a recent amendment to its registration statement with the SEC.
Heading into a roadshow in Hong Kong, South Korea and the U.S., the Fosun International Ltd.-owned luxury fashion company lowered its pre-money equity valuation from $1.25 billion to $1 billion. Group revenue grew 73 percent on a year-to-year basis to 202 million euros in the first half of 2022. The company is on track to achieve profitability in 2024.
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The 20 percent cut is due to “challenges in the global stock market and the currency market,” said Joann Cheng, chairman and chief executive officer of Lanvin Group, in an exclusive interview with WWD.
“Eleven percent of the adjustment was due to the shifts in the currency market, especially the euro and U.S. dollar exchange rate. Nine percent of the adjustment reflects this year’s global economic changes and the performance of our reference peer group,” Cheng said.
“The new valuation will help us deliver significant upside potential and long-term value for both current Primavera Capital Acquisition Corp. shareholders and future shareholders of Lanvin Group,” she added. “Our outlook for the business remains unchanged.”
Lanvin Group also confirmed Meritz Securities Co. Ltd., a South Korea-based financial services conglomerate, as its latest investor. Meritz has committed $50 million in a private placement and is considering an additional investment of up to $15 million via a PIPE subscription, or private investment in public equity, as Lanvin Group continues the de-SPAC process before going public, a mandatory last step in which a listed SPAC successfully merges with a private company.
“Meritz’s decision to join our strategic ecosystem shows a global investor’s confidence in our growth potential,” Cheng commented. “As South Korea becomes an increasingly important luxury market, it also means some potential cooperation opportunities with them down the line.”
The owner of Lanvin, Sergio Rossi, Wolford, St. John and Caruso highlighted results for Lanvin and Wolford in the interim report. For Lanvin, global sales in the first half grew 117 percent to 64 million euros compared to the same time last year. Wolford, the biggest brand in terms of sales in 2021, saw its revenue grow 29 percent year-over-year to 54 million euros.
“We have seen all our group brands use different strategies to grow and achieve our goals,” Cheng said. “Lanvin has been expanding into footwear and leather goods categories while growing its online distribution. The brand will continue its retail expansion with a Tokyo store set to open in the next few months.
“Wolford’s unique fabrication has helped the brand grow via product lines. The W athleisure collection has shown tremendous growth,” she continued. “Sergio Rossi, a brand we acquired last year, has continued to expand its retail presence online and offline, utilizing more localized marketing initiatives to gain popularity on platforms like Xiaohongshu.”
Key markets continued to show growth momentum. Group revenue grew 91 percent year-over-year in the first half of 2022 in the European market and 58 percent year-over-year in the North American market during the same period.
Cheng said the U.S. market, the biggest for the group, has shown “strong growth momentum” after recovering from the pandemic. America accounts for about 15 percent of group sales. “There is still a lot of room for growth, aside from the brand St. Johns, we expect the market to grow by at least 10 percent,” Cheng said.
The Greater China market grew 32 percent in the first half, while sales in the rest of Asia grew 194 percent year-over-year. The Great China market currently makes up around 14 percent of group sales, which includes 10 percent from mainland China. Cheng expects the Greater China market to grow by around 28 percent.
As for future acquisition targets, Cheng said the group is looking at “new luxury” brands that target Gen Z shoppers or brands with a “relatively new business model and a strong online presence,” Cheng said. “It’s still early stages in the selection process. We want to focus on the completion of the IPO first,” she said.
