Dive Brief:
- Lanvin Group revenue dropped 20% in the first half of fiscal 2024 to 171 million euros, or about $192 million, according to a Monday earnings release.
- Revenue at Sergio Rossi was down nearly 40% for the period, while Wolford dropped 28%. St. John dropped 14% and Lanvin’s namesake brand was down by 15%, while Caruso revenue declined 1% year over year.
- By channel, the company reported a DTC revenue drop of 14% and a wholesale revenue decline of 30% for the half. Regional revenue in the combined region of Europe, Middle East and Africa was down 27%, and down 24% in China. North America revenue was down 11% year over year.
Dive Insight:
The company attributed its revenue decline to “global market softness coupled with a struggling wholesale market.”
“We faced a tumultuous market in the first half of 2024,” Zhen Huang, chairman of Lanvin Group, said in the release. “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.”
At the Lanvin brand, wholesale revenue dropped 23% and DTC revenue fell 10%, while in-store boutique and outlet revenue dropped 3%. The company said in its release that the brand was “aggressively executing initiatives to increase retail and digital traffic” for the remainder of 2024. In addition, it said it would “implement operational cost efficiencies” in order to improve profits in its DTC channel, and emphasize leather goods, accessories and “seasonless carryover product” across categories.
The company attributed the revenue decrease at Wolford mainly to “integration issues with its new logistics provider that resulted in significant delays in shipments.” However, wholesale challenges were also a factor, as the channel fell 53% in H1.
Meanwhile, Sergio Rossi saw a 49% decline in the combined region of Europe, Middle East and Africa, which the company said in the release was the brand’s largest market. Overall wholesale for the brand was down 60%, and the company said the brand would plan to work on improving its supply chain while continuing to right-size its retail fleet and overhead.
“We spent much of the first half committed to our marketing plan, but also prioritized rationalizing our cost base to fit the current market environment,” Eric Chan, CEO of Lanvin Group, said in the release. “Furthermore, we are committed to our product strategy and investing in product development, which is why we are excited to have the new creative leaders who have joined our family.”
Earlier this summer, the company appointed new creative directors at the Lanvin brand and Sergio Rossi, as well as a new CEO at Wolford. While the hires may help with a turnaround, that reversal may not come until next year, per the company’s earnings outlook.
“The Group expects a challenging second half of 2024, but will remain proactive in its cost-reduction and operating efficiency efforts,” Lanvin Group said in its release. “Lanvin and Sergio Rossi plan to further emphasize marketing initiatives to forge their creative paths for 2025 with the additions of Peter Copping and Paul Andrew, respectively.”
Lanvin Group’s earnings echo similar challenges across the sector. In August, Salvatore Ferragamo posted a 12.8% revenue drop for Q1 alongside a year-over-year profit drop of 73%. Meanwhile, Kering, LVMH and Burberry all posted year-over-year earnings declines in July.
Lanvin Group planned to be proactive in its approach to the near-term slowdown, Chan said, adding, “...we remain resolute in investing in our brands to forge our path forward, and to capitalize on our momentum as the markets improve.”
