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13 Feb, 2018

Fosun tries on majority stake in Lanvin

Fosun tries on majority stake in Lanvin

China’s Fosun International has reportedly prevailed in an auction for French fashion house Lanvin, outbidding Qatar-based investment fund Mayhoola, which controls Italy’s Valentino and Balmain. Reuters cited sources close to the matter who said «it was close» but the Hong Kong-listed firm tabled the highest offer for the cash strapped retailer.

Lanvin has been struggling as of late following the departure of its leading designer Alber Elbaz in 2015, resulting in a significant decline in sales.

Online news site Fashion Network said Fosun is expected to inject around USD 100 million for a controlling stake, in turn the current majority owner, Taiwanese businesswoman Shaw-Lan Wang, will retain a minority interest of roughly 20 per cent.

With Lanvin facing cash shortages, Wang reportedly said she would invest more money into the company late last year, but, shortly following, the group decided to look at other industrial and financial plans that did not involve a capital increase, Reuters observed.

Business of Fashion picked up on the new development and reported Elbaz left the company after disagreements with the owner causing sales to decline around 23 per cent to EUR 162 million, while posting its first loss in over ten years.

People close to the fashion house told Reuters losses had been forecast to widen to around EUR 27 million last year, from EUR 18.3 million in 2016. Lanvin owns French leisure group Club Med, as well as a stake in Italian luxury menswear retailer Caruso.

Earlier this month, the WWD reported the company is in discussions with several investors to offload a majority stake. Mayhoola was said to be in disagreements with Wang regarding the high price, while Kering and Michael Kors Holdings have supposedly turned away due to the high level of investment required to restore the business. Wang acquired the group, through holding firm Harmonie, which also comprised Pierre Fabre, Marcel Dassault and Young Brothers Groups, with AXA Investment Managers helping with funding, for an undisclosed amount in 2001. Prior to the takeover, Lanvin was owned by makeup and face care giant L’Oreal.

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