Chinese Firm Fosun Buys a Majority Stake in Lanvin

PARIS — Fosun International has acquired a majority stake in French fashion label Lanvin, the two companies said on Thursday. This confirms a report in FN’s sister publication, WWD, on Feb. 12 that Fosun beat Qatari rival Mayhoola Group to win control of the label, which is facing a liquidity crisis.

The sale agreement leaves the current shareholders, Taiwanese media magnate Shaw-Lan Wang and Swiss businessman Ralph Bartel on board with a minority stake, Fosun and Lanvin said in a joint statement, which contained no financial details.

“Lanvin will leverage its strong fashion legacy, and coupled with Fosun’s global resources will enter a new phase of expansion,” they said.

The Chinese conglomerate plans to invest 120 million euros in the struggling house, according to a source. A spokeswoman for the house declined to confirm that sum, or to provide any further details on the company’s shareholding structure.

Wang and Bartel have been offered the opportunity to provide a portion of the full amount, a decision they will have to make in the next couple of months, said the source. If she does not reinvest in the brand, Wang’s share will decline to around 20 percent from 75 percent previously, the source said.

“Given her track record, she has no tendency to reinvest,” said the source.

There will be no immediate changes either in the management or creative direction of the house, the Lanvin spokeswoman said. “The decision is to work with the existing teams,” she said. Olivier Lapidus and Lucas Ossendrijver are the creative directors of womenswear and menswear, respectively.

Following the appointment last July of Lapidus, succeeding Bouchra Jarrar after a run of only two seasons, two board members, including Bartel, resigned. Wang subsequently brought back Nicolas Druz as CEO, replacing Michèle Huiban, who remains with the company as deputy managing director.

“Fosun’s understanding of the brand and strong track record in the European and global market, including their successful partnership and transformational strategies with Club Med, Tom Tailor and many others, make us believe that Fosun is the right long-term strategic partner to team up with,” Druz said in the statement.

Guo Guangchang, chairman of Fosun International, said: “Not all brands can go through more than a century’s time and still shine and be admired like Lanvin. We feel honored to become its new partner and believe this globally renowned brand and its rich history has tremendous growth potential.”

Joann Cheng, vice chief financial officer of Fosun International and executive president of Fosun Fashion Group, noted Lanvin adds a luxury asset to Fosun’s Fashion Group division, which has been given a mandate to invest globally in the fashion and retail industry to leverage the momentum in Chinese consumer spending.

The group, which is active in the health, property and mining sectors, made its first move into fashion in 2011 with the acquisition of a minority stake in Greek jewelry brand Folli Follie.

In 2013, it invested in the Italian tailor Caruso, eventually assuming control of the company last year, and in 2014 it bought a stake in German fashion brand Tom Tailor Holding AG.

Fosun also holds a stake in St. John Knits Inc., the American heritage knitwear brand, and last December entered into exclusive talks with La Perla with a view to purchasing a controlling stake in the Italian lingerie maker.

“As China becomes the main growth driver of the global luxury market, we are confident that Fosun can bring great incremental value to Lanvin with our global resources and expertise, while being absolutely committed to Lanvin’s high luxury positioning and its exceptional quality of products manufactured in France and Italy,” Cheng said.

The acquisition comes on the heels of recent news that Chinese textile and apparel giant Shandong Ruyi Group, which controls SMCP and Hong Kong’s Trinity Group, was taking a majority stake in Bally.

It ushers in a new era at Lanvin, which was under pressure to find an investor before the end of the month, as it was fast running out of funds. After an auditor last year issued a warning over the label’s financial situation, Wang promised to inject cash into the struggling business, but the investment never materialized.

The oldest French fashion house still in activity has seen sales erode since a peak of 235 million euros in 2012. In 2016, revenue fell 23 percent to 162 million euros, with a net loss of 18.3 million euros, marking its first red ink in nearly a decade.

Mayhoola Group, which controls Valentino, is said to have expressed interest in Lanvin prior to its 2016 acquisition of Balmain, but balked at the price Wang was seeking, said to be in the neighborhood of 500 million euros.

Lanvin has struggled to find its footing since dismissing creative director Alber Elbaz in October 2015, following disagreements between the designer and Wang over the company’s direction. Elbaz catapulted the brand’s notoriety during his 14-year tenure.

The designer received a settlement in the neighborhood of 10 million euros in an out-of-court arbitration late last year in his long-running dispute with Lanvin for compensation over his dismissal, according to several sources.

Wang bought Lanvin from L’Oréal in 2001, and in 2007 sold the brand’s fragrance and cosmetics business to Inter Parfums SA for 22 million euros. Lanvin operates in more than 50 countries selling ready-to-wear for women, men and children, and accessories including footwear and leather goods.

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