Lanvin RTW Spring 2018

PARIS Fosun International has become the latest Chinese firm to buy into a European luxury label, beating Qatari rival Mayhoola Group to win control of French fashion house Lanvin, several sources with knowledge of the matter said Monday.

“Nothing is official for the moment,” said one source, adding that staff at Lanvin have yet to be notified of the deal.

The sale agreement leaves Taiwanese media magnate Shaw-Lan Wang, who previously held a 75 percent stake, on board as a minority shareholder with 20 percent. Swiss businessman Ralph Bartel is said to be holding on to his 25 percent share in the house’s capital.

Officials at Lanvin and Fosun declined to comment.

The acquisition comes on the heels of news last Friday that Chinese textile and apparel giant Shandong Ruyi Group, which controls SMCP and Hong Kong’s Trinity Group, was taking a majority stake in Bally.

It ushers in a new era at Lanvin, which was under pressure to find an investor before the end of the month, as it faced a liquidity crisis. After an auditor last year issued a warning over the label’s financial situation, Wang promised to inject cash into the struggling business, but the funds never materialized.

Fosun has pledged to bring 100 million euros to the table, said a second source, although they cautioned that this would provide only temporary relief, given Lanvin’s deepening losses.

The oldest French fashion house still in activity has seen sales erode since a peak of 235 million euros in 2012. In 2016 revenues fell 23 percent to 162 million euros, with a net loss of 18.3 million euros, marking its first red ink in nearly a decade.

The company’s 2018 budget projects losses of more than 40 million euros, following a deficit of more than 50 million euros in 2017, the second source said.

While Fosun’s name had emerged in recent days as one of the bidders, it was seen as the less likely choice given its relative lack of experience in fashion. Industry news site Fashion Network first reported that Fosun had emerged victorious.

The group is active in the health, property and mining sectors, and owns assets including France’s Club Med and minority stakes in Greek jeweler Folli Follie and U.S. label St. John Knits Inc. In November, it bought a majority stake in the Italian tailor Caruso and is also looking at purchasing a controlling stake in lingerie firm La Perla.

Mayhoola Group, which controls Valentino, is said to have expressed interest in Lanvin prior to its 2016 acquisition of Balmain, but balked at the price Wang was seeking, said to be in the neighborhood of 500 million euros.

Lanvin has struggled to find its footing since dismissing creative director Alber Elbaz in October 2015, following disagreements between the designer and Wang over the company’s direction. Elbaz catapulted the brand’s notoriety during his 14-year tenure.

The designer received a settlement in the neighborhood of 10 million euros in an out-of-court arbitration late last year in his long-running dispute with Lanvin for compensation over his dismissal, according to two sources.

As part of its cost-cutting efforts, Lanvin plans to stage a smaller-than-usual runway show on Feb. 28 to showcase its fall women’s collection designed by Olivier Lapidus. Its guest list has been trimmed to 450 guests from 750, but the house is sticking with a runway format rather than a presentation, said a source familiar with its plans.

Wang bought Lanvin from L’Oréal in 2001, and in 2007 sold the brand’s fragrance and cosmetics business to Inter Parfums SA for 22 million euros.