Lanvin Group performance dented by soft luxury market globally

Lanvin Group saw revenue of €171 million in the first half of 2024 but it was impacted by “global challenges” and it was very clear that the firm wasn’t happy about the results report’s numbers.

In fact, that group revenue figure represented a 20% fall year-on year and while it said the gross profit margin “remained steady”, it was actually down 1% at 57.5%.

It also said adjusted EBITDA “held steady”, but what that meant in practice was that it fell “only €1 million, due to proactive cost management initiatives”. The final figure was a loss of €42.1 million.

Yet it said the Lanvin, St. John and Caruso labels “all showed marked gross profit margin improvement from better full-price sell-through and strategic inventory management”.

It was affected by global luxury market softness, particularly in EMEA and Greater China, while the wholesale channel was also dented. But the Lanvin brand showed strong growth in APAC, outside of Greater China.

Wolford’s revenue and margin were impacted by “a significant shipping delay due to integration issues with a new logistics provider; and Sergio Rossi saw a planned rationalisation of third-party production resulting in lower revenue”.

But the firm highlighted how “strategic actions were taken in H1 2024 to ensure our brands’ long-term competitiveness globally, including the appointment of Peter Copping as Lanvin’s new Artistic Director; appointment of Regis Rimbert as Wolford’s CEO; and the optimisation of production and supply chain management for Sergio Rossi”.

Chairman Zhen Huang said: “We faced a tumultuous market in the first half of 2024. While we anticipate this will continue for the near-term, we remain committed to the long-term growth of our group and our path to profitability.”

The numbers

Looking at the results in detail, that 20% fall in revenue came as revenue in EMA was down 27% and in Greater China it dropped 24%, although it was down only 7% in Asia if Greater China was excluded. It was down 11% in North America.

Lanvin revenue fell from €57 million in H1 2023 to €48 million in H1 2024, mainly due to the slowdown in global luxury consumption coupled with challenging wholesale. Retail including boutique and outlet was down only 3%, while the overall DTC channel declined by 10% and wholesale by 23%.

EMEA saw the largest decrease at 21%, driven by a decrease in European wholesale receipts. North America and APAC declined by 9% with Greater China at 14%, APAC excluding Greater China generated positive 9% growth.

The brand’s gross profit fell to €28 million from €32 million but the gross profit margin increased from 56% to 58%, due to increased full-price sell-through and strategic inventory management.

For the rest of 2024, Lanvin is “aggressively executing initiatives to increase retail and digital traffic and implement operational cost efficiencies to improve DTC profitability”. 

Wolford revenue fell 28% from €59 millionto €43 million, mainly driven by the aforementioned integration issues with its new logistics provider that resulted in significant delays in shipments. Additionally, the challenging wholesale market in Europe also impacted revenue. DTC fell 14% and wholesale by 53%, while EMEA saw the largest drop at 34%, North America by 10%, and APAC by 24% with Greater China seeing a 20% decline.

The gross profit margin fell to 63% from 72% due to the logistics issues as well as a planned liquidation of excess inventory.

Sergio Rossi revenue dropped 38% to €20 million. The brand saw a 49% decline in its largest market, EMEA, and 22% in APAC with Greater China decreasing by 34%. The DTC channel was down 17% overall and e-commerce by 2%. Wholesale, which includes third-party production, decreased by 60%. But the gross profit margin landed at 50%, relatively flat from H1 2023. 

St. John revenue was down 14% to €40 million and was consistent across the distribution channels with DTC, including e-commerce declining by 15% and wholesale by 13%. North America, by far its largest market, decreased by 10%, while APAC, which represents less than 10% of revenue, was down 46%, due to general market softness.

The gross profit margin was significantly higher growing from 62% to 69% due to increased full-price sell-through and better channel mix. 

Finally, Caruso maintained almost flat revenue with just a 1% decline. Caruso’s Maisons business, its third-party production unit, “showed some softness”, but it was offset by its Caruso brand business, which grew by 21% with strong sales of its ready-to-wear and made-to-measure products.

Gross profit increased from €5 million to €6 million, and the gross profit margin increased from 26% to 29% from improved in-house production efficiencies and a reduction of outsourcing.