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Dec 15, 2022
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Lanvin Group makes its debut on NYSE with splashy chic affair

Dec 15, 2022

"Dress sharply, and they remember the dress, dress impeccably, and they remember the woman," said New York Stock Exchange president, Lynn Martin, by way of an adage that female executives use as a mantra.

Lanvin - Spring-Summer 2023 - Womenswear - Paris - © PixelFormula

It was also a fitting way to introduce Joann Cheng, the chairman and chief executive officer for the Lanvin Group, as the Shanghai-based luxury group prepared to ring the opening bell on the NYSE in its first IPO.

The group—which, along with the French house founded by Jeanne Lanvin in 1889, also includes Sergio Rossi, Wolford, St. John, and Caruso—stakes its success on the ability to dress plenty of women and men impeccably and is eager to capture a more significant stake in the luxury market.

In partnership with Primavera Capital or PCAC, the brand has taken its next step towards becoming a China-based luxury group akin to LVMH, Kering, and Richemont by going public.

Martin shared her shopping relationship at St. John and Wolford with the crowd of mostly Lanvin Group brand executives, investment teams, and press gathered in a stately ornate conference room just before witnessing the historic moment at the New York financial institution.

Specifically, the Lanvin Group principals in attendance were: David Chan, executive president & co-chief operating officer, Lanvin Group; Chris Tate, operating partner, Lanvin Group; Siddhartha Shukla, deputy general manager, Lanvin; Silvia Azzali; chief commercial officer, Wolford; Paul Kotrba, chief operating officer, Wolford; Riccardo Sciutto, chief executive officer, Sergio Rossi; Andy Lew, global CEO of St. John; Marco Angeloni, chief executive officer, and chairman, Raffaele Caruso SpA; Sergio Rossi artistic director, Evangelie Smyrniotaki; and St. John creative consultant Karla Welch. Martin introduced Cheng and Max Chen, chairman, and CEO of PCAC and partner of Primavera Capital.

Addressing the crowd, Cheng thanked the NYSE and expressed gratitude to her team.

"As I said to my teams, we are young—five years old—and have a long way to go, but proud to say we made this milestone today. I know it's not easy, and we couldn't achieve the moment today without you. We are turning the page and starting a new journey to become a wonderful global luxury group.

"Being a woman leader is not so easy, but easier when passion and love come from your heart. Twenty years ago, when I was an accountant at KPMG, my husband asked me, 'what are your three dreams?' I answered that I would like to walk a Red Carpet, and I want to take one company publicly listed, so now, two dreams are coming true with the help and support of everyone here today."

While not red, the brand did unroll a white carpet at the entrance of the exchange along with a large banner that read Lanvin hanging on the side of the historic building, with a smaller one underneath reading 'Heritage for Tomorrow' listing the individual brands.

While typical fanfare for the fashion industry, overhearing the guards at the security checkpoint comment on the pageantry, it might not be standard at the NYSE. (Speaking of the crimson hue, Cheng wore red, which denotes luck, joy, and happiness in Chinese culture, in a suit made by Caruso).

Prior to the momentous bell ringing on the trading floor, guests mingled and enjoyed breakfast. Cheng spoke to FashionNetwork.com exclusively before the post-opening Zoom Q&A webinar that was scheduled.

Lanvin - Spring-Summer2023 - Womenswear - Paris - © PixelFormula

"Our group has only one brand, St. John, which is U.S.-based, but if you look at the rest of the brands, which are global, they only command 15 percent of the U.S. market and 10 percent of the Asian and China market, so there is room for growth," she said.

She revealed that luxury brands such as Louis Vuitton and Dior command 25 and 20 percent, respectively, in those markets. She followed that up in the press conference adding, "so there is 10 to 15 percent room in the industry to reach; we have room to grow."
The figures inform Cheng's overall goals for the group.

"The market is big enough for us to grow faster. There is a lot of low-hanging fruit, so our focus is on what we should do to drive growth, and the brands all have equity," she stated. She spelled out that growth via retail expansions in the U.S., China, and some parts of Europe, improved digital channels, and expanded product categories.
"We have invested a lot in the last couple of years to set up the foundation for solid growth in the future, such as investing in product lines such as at Lanvin. We are not just focused on ready-to-wear but spending more time developing shoes, leather goods, and other accessories. This also brought us profitability," she continued, noting the Lanvin Group brand's revenues rose 73% to €202 million in the first half of the year.

The flagship Lanvin brand saw 117% global sales growth, with wholesale up 260% in October 2022.

Cheng was also proud to boast the market mix of the five brands.

"There is a unique synergy in the group with the ingredients to boost each other. We are relatively small in size, and the brands are complimentary versus competitive, so it feels like a family member. The others have already been making shoes (Rossi), knits (St. John), and suits (Caruso) for Lanvin," she noted, suggesting more brand collaborations, such as the Sergio Rossi X Wolford, were on the way.

Deputy general manager of Lanvin, Siddartha Shukla, who oversees Lanvin's global expansion, concentrating on commercial development, product strategy, digital excellence, and brand positioning initiatives, confirmed one success of those synergies.

"Caruso does the Lanvin tailoring. We have been bringing it back in a big way in the past three seasons, and tailoring is a huge part of it from a selling perspective. It's grown 100 percent simply because we focused on it," he said. 

When asked, while not naming any brand in particular, Cheng noted eventually, the group will grow.

"There is a long list of brands in the pipeline we would like to acquire, but we are not in a rush. We run this business like a corporation; we are not a private equity firm or investment-based institution," she asserted.

"We spend 80 to 90 percent of our efforts on operations because I believe a smart investment is one step, but value creation comes from data operations.  So we are not rushing to acquire because we don't want to drive the value operation out of the current brands."

She did offer what it might look like, "we want to keep the diversification (of brands)  that is one of the investment strategies at least until maybe we will have more than ten."

Around 9:20 am, the management team headed down to ring the opening bell, complete with the gavel Martin handed Cheng. The well-dressed guests were escorted to a spot on the trading floor directly in front of the bell podium to cheer on the Lanvin Group as Cheng did the honors starting at 9:29:45 am.

A few minutes later, she moved along with Martin to ring another bell to signify the opening trade of the stock. The listing of the shares and warrants of Lanvin Group Holdings Limited ("LGHL") are under the new ticker symbols "LANV" and "LANVW," opened at $10.20 per share. It was $7.63 with a -$2.57 (-25.20% change) as the bell closed its first day of trading.  

Lanvin - Spring-Summer2023 - Womenswear - Paris - © PixelFormula

In a post-opening press conference, Cheng explained PCAC's role in helping to build the Lanvin Group to create "one of the most unique luxury fashion businesses in the world" as he put it.

"PCAC is a global alternative asset management firm managing over 17 billion dollars with offices in Hong Kong, Beijing, Singapore, and Silicon Valley. In our 12-year history, one key investment strategy is to partner with top global consumer brands to help accelerate growth in Asia. Our experience in this area, we listed PCAC with a purpose to focus on a unique Asian angle," he said.

The discussion also led to the complete opening of China after the continued lockdowns that have lasted more than three years.

"Right now, the focus is to stay safe and healthy, and as brands, we try to help take care of them safely, so they have a smooth transition into a full opening. They are eager to get out and travel, go shopping, and have experiences," noted Cheng, reiterating the focus on Asia.

On the topic of creative direction and if growth plans foresee any changes, Cheng reiterated its relationship to individual businesses.

"We continue to improve our operations, continuously investing in our creativity and design teams, a core value for all luxury brands," she said, adding, "Every brand has its DNA to follow. Even if you have big names as creative directors or chief designers, they follow the brand's DNA as the most important."

She cited Parisian elegance and second-skin tech fabrics at Lanvin and Wolford DNA, respectively.

Sergio Rossi's Sciutto has made returning to that core DNA a part of his role since becoming CEO in 2017.

"When I started, there was no archive; now I have personally amassed over 7,000 pairs of Sergio Rossi shoes starting when the brand started 71 years ago," he said, adding, "There was this 'porno chic' campaign when I took over the brand, so I needed to pull back on this audacity in design and introduce something timeless, chic and connected to Sergio Rossi.  This was the SR1 slipper that sells more styles today than its launch five years ago," he continued. The CEO was especially excited about an upcoming collaboration with the brand Area.

Cheng was also excited about the brand's new status and the goal to bring returns to its investors in five years.

"We finished this transaction despite some macro challenges but are proud we have raised over $150 million in fresh capital, enough to operate the brands until profitability with continued support from our majority shareholder to convert our debt, the shareholder loans, into equity to be a debt-free company. IPO is not the purpose but a milestone. By focusing on day-to-day operations, we will deliver results and have the confidence to have a brighter future for the Lanvin group," concluded Cheng.

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