The Chinese fashion group Lanvin Group was able to increase its sales significantly in the first half of the 2022 financial year. In the run-up to the planned IPO, however, the management lowered its assessment of the company’s value in view of the adverse general conditions.
Strong increases in Europe and North America are spurring growth
On Monday, the parent company of brands such as Lanvin, Wolford and Sergio Rossi announced that it was able to generate group sales of 202 million euros in the months of January to June. This exceeded the level of the same period of the previous year by 73 percent.
The decisive factors were strong growth in Europe (+91 percent) and North America (+58 percent). In China, the development was slowed down by the temporarily tightened protective measures against the Covid 19 pandemic. Nevertheless, sales there rose by 32 percent. In the rest of Asia, the group achieved an increase of 194 percent by expanding into “new markets with great potential”.
Both main brands were able to increase significantly: The sales of the Lanvin fashion house reached a level of 64 million euros in the first half of the year and were therefore more than twice as high as in the same period of the previous year (+117 percent). The Austrian legwear specialist Wolford AG had already reported growth of 29 percent to EUR 54 million at the end of September.
The management lowers its company valuation in the run-up to the IPO
With a view to the forthcoming IPO, however, the management revised its company valuation: the assessment of the equity value was reduced from 1.25 to one billion US dollars. The group cited the development of exchange rates and the stock market environment since the publication of the original forecast in March as reasons. At the time, the Lanvin Group had announced that it wanted to complete the IPO on the New York Stock Exchange by merging with the already listed Primavera Capital Acquisition Corporation (PCAC).
CEO Joann Cheng explained the rationale behind the revaluation: “Notwithstanding our own strong results, the new transaction terms not only reflect this year’s global economic changes and the results of our competitors, but more importantly our aspirations for both current PCAC shareholders and those in the future Lanvin Group shareholders to create significant upside and long-term value,” she said in a statement. “Our business outlook remains unchanged and we believe the adjusted valuation represents a very attractive entry point for investors as we continue to capitalize on untapped growth opportunities around the world.”