The Chinese fashion group Lanvin Group was able to increase its sales in the first six months of the 2023 financial year. The parent company of brands such as Lanvin, Wolford and Sergio Rossi was in the red despite the increase in sales.
In the first half of 2023, the Lanvin Group achieved sales growth of 6.4 percent to 215 million euros compared to the previous year. The loss was 72.2 million euros compared to 68.7 million euros in the same period last year. The adjusted, reported loss before interest, taxes, depreciation and amortization (EBITDA) was EUR 40.9 million (EUR 35.5 million in the first half of 2022), which the group particularly attributed to the low sales of the main brand of the same name and investments in sales and marketing costs for setting up Lanvin Lab, physical fashion shows – previously held digitally – and other initiatives.
Sales of the main Lanvin brand fell year-on-year from EUR 64 million (first half of 2022) to EUR 57 million (first half of 2023). The opening of a new flagship in New York in the second half of the year and market entry in the Middle East are expected to spur growth for the remainder of the year.
Meanwhile, the other brands were able to further expand their sales. Sergio Rossi increased sales year-on-year by 22.4 percent to 27 million euros, St. John by 11.3 percent to 47 million euros, Caruso by 33.6 percent to 20 million euros and the Austrian hosiery manufacturer Wolford, as already mentioned on Tuesday announced by eight percent to 59 million euros.
Sales growth in all markets
Broken down by region, the fashion group was able to increase sales in all of its markets. In China, where the pandemic protection measures had still slowed down developments in the previous year, the group increased sales by 13.9 percent in the months from January to June 2023, and in the rest of the Asian market it was even 27.1 percent. Europe, Middle East and Africa saw sales up 5.3 percent and North America up 2.6 percent.
However, broken down by the individual sales channels, the group was able to increase sales in direct sales (5.1 percent) and wholesale (2.2 percent) compared to the previous year. The growth in other revenues was generated by license income from the repurchase of the trademark rights in Japan, which were acquired from existing license partner Itochu Corporation in March, as well as income from the release of licenses.
Outlook for the second half of the year
Lavin Group has continued its track record of global growth as it progresses towards profitability, said Group CEO Joann Cheng. “We have set the stage for our brands to accelerate their growth and we are excited about our prospects for the remainder of 2023,” said the CEO.
Looking ahead to the remainder of fiscal 2023, the Group continues to focus on total sales and expects to increase the percentage of fixed costs from total costs (operating leverage) by streamlining the store network and stabilizing operating costs by Achieve breakeven Adjusted EBITDA in 2024.