China’s Lanvin Group, a global luxury fashion company, has announced its financial results for the first half of fiscal 2024 (H1 FY24), reporting a revenue of €171 million (approximately $191 million), reflecting a 20 per cent decrease compared to the same period in the previous year. The decline is primarily attributed to global market softness and challenges in the wholesale sector.
Lanvin Group reported a 20 per cent revenue decline in H1 FY24 to €171 million, driven by global market softness and wholesale challenges.
Key brands like Lanvin, Wolford, and Sergio Rossi saw significant revenue drops, with regional declines in EMEA, Greater China, and North America.
Despite lower revenue, some brands improved gross profit margins.
The direct-to-consumer (DTC) channel experienced a 14 per cent drop in revenue, while wholesale revenue fell by 30 per cent. Other revenue streams, including royalty and clearance income, also decreased by 15 per cent, driven by a strategic reduction in clearance inventory by Lanvin.
Regionally, revenue in the Europe, Middle East, and Africa (EMEA) region declined by 27 per cent, while Greater China saw a 24 per cent decrease. The rest of Asia, excluding Greater China, reported a smaller decline of 7 per cent, and North America experienced an 11 per cent drop, the company said in a press release.
The group’s gross profit for the period was €98 million, representing a 58 per cent margin, down from €125 million and a 59 per cent margin in H1 FY23. The contribution profit was negative at minus €7 million. Adjusted EBITDA fell to minus €42 million, a slight increase in loss from minus €41 million in H1 FY23.
Lanvin brand’s revenue dropped from €57 million in H1 FY23 to €48 million in H1 2024. Retail, including boutiques and outlets, was down by only 3 per cent, while the overall DTC channel declined by 10 per cent, and wholesale by 23 per cent. Geographically, EMEA saw the largest decline at 21 per cent. North America and APAC both declined by 9 per cent, with Greater China down by 14 per cent. However, APAC excluding Greater China showed positive growth of 9 per cent. Despite the revenue decline, Lanvin’s gross profit margin improved from 56 per cent to 58 per cent, though gross profit itself fell to €28 million from €32 million.
Wolford’s revenue saw a significant decline of 28 per cent, dropping from €59 million in H1 FY23 to €43 million in H1 2024. On a channel basis, DTC revenue decreased by 14 per cent, while wholesale revenue plummeted by 53 per cent. Regionally, EMEA recorded the largest decrease at 34 per cent, followed by APAC at 24 per cent, with Greater China seeing a 20 per cent decline. North America’s revenue was down by 10 per cent. Wolford’s gross profit margin also contracted, decreasing from 72 per cent to 63 per cent.
Sergio Rossi reported a 38 per cent decline in revenue, falling from €33 million in H1 FY23 to €20 million in H1 2024. The brand’s largest market, EMEA, saw a significant decline of 49 per cent, while APAC revenue dropped by 22 per cent, with Greater China down by 34 per cent. The DTC channel declined by 17 per cent overall, with e-commerce dropping by 2 per cent. Wholesale, which includes third-party production, experienced a steep decline of 60 per cent. The gross profit margin remained relatively stable at 50 per cent.
St John’s revenue decreased by 14 per cent, from €47 million in H1 FY23 to €40 million in H1 2024. The decline was consistent across distribution channels, with DTC, including e-commerce, down by 15 per cent, and wholesale by 13 per cent. North America, St. John’s largest market, saw a 10 per cent decline, while APAC, which represents less than 10 per cent of revenue, decreased by 46 per cent. Despite the revenue drop, St. John’s gross profit margin improved significantly, rising from 62 per cent to 69 per cent.
Caruso’s revenue remained relatively stable, with only a 1 per cent decline. However, the brand saw an improvement in gross profit, which increased from €5 million to €6 million, and the gross profit margin rose from 26 per cent to 29 per cent.
“Struggles in the wholesale channel compounded the issues of a softening global luxury market, in the first half of FY24. We spent much of the first half committed to our marketing plan, but also prioritised rationalising our cost base to fit the current market environment. Furthermore, we are committed to our product strategy and investing in product development,” said Eric Chan, CEO of Lanvin Group.
Fibre2Fashion News Desk (DP)