On the road to an initial public offering later this year, Lanvin Group touted itself Wednesday as “the next industry champion” representing “the next generation of luxury.”
During a webinar to discuss its SPAC route to Wall Street following a merger with Primavera Capital Acquisition Corp., which was unveiled late on Tuesday, Lanvin Group executives trumpeted its “significant growth prospects” and its ability to nurture and reinvigorate heritage brands.
David Chan, executive president and co-chief operating officer of Lanvin Group, said revenues are projected to almost triple to 989 million euros by 2025 from 333 million euros last year, fueled primarily by the fizzy growth regions of North America and Asia. China’s share of Lanvin Group sales is expected to double to 28 percent by 2025.
Future acquisitions are meant to contribute 114 million euros to coffers by 2025, and potential targets are extremely varied.
“We are very open-minded,” Chan said, rattling off such possibilities as a “newer” designer label, an accessories or leather goods firm, a manufacturer or fabric developer, digital infrastructure or a consumer-led digital firm.
“Fashion is from A to Z — it’s an ecosystem,” echoed Joann Cheng, chairman and chief executive officer of Lanvin Group. “We’re not only focused on the heritage brands…and not only on majority stakes.”
Meanwhile, the group is expected to reach profitability by 2024. Its operating loss stood at 130 million euros in its pro-forma 2020 tallies.
The Lanvin brand, which recently welcomed Theory executive Siddhartha Shukla as deputy general manager, was the standout performer last year, with revenues in the first nine months of 2021 vaulting 107 percent versus the same period in 2020, with North America rocketing ahead 283 percent.
During a slick presentation of flashing runway clips and even singer Adele emoting in a music video, Chan noted that Lanvin ended 2021 with only 27 stores globally — a fraction of the footprint of Europe’s flagship luxury players, which typically operate between 300 and 400 boutiques worldwide.
Category expansion is a growth path for brands in its existing portfolio, with Chan describing healthy progress made in building a leather goods and sneaker business at Lanvin, and for extending Austrian hosiery expert Wolford into leisure and activewear categories. The luxury company is also home to the Sergio Rossi, St. John and Caruso brands.
He also described vast potential for expansion in online channels, noting that Lanvin Group brands only recently entered the JD.com and Farfetch platforms.
Wolford also had a good year, with revenues advancing 63 percent in Greater China and 50 percent in North America.
Asked about time lines for the listing on the New York Stock Exchange, Chan said an audit needs to be completed, and the F-4 registration form should be filed in April. Then the group has to wait for Securities and Exchange Commission regulatory approval. “We’re hoping we can get everything wrapped up by [the third quarter] of this year,” he said.
The merger deal gave Lanvin Group a pro-forma enterprise value of $1.5 billion, with a combined pro-forma equity value of up to $1.9 billion, the companies said. The fashion house will ultimately trade under the symbol “LANV.”
As part of the deal, Lanvin Group shareholders will roll their shares in the group into the combined venture, giving them a roughly 65 percent stake altogether, as reported. Lanvin Group will receive proceeds of up to $544 million and plans to use the money “for potential future acquisitions that complement its luxury fashion ecosystem.”
“It’s not a cash-out event for anybody,” Chan stressed on Wednesday.
SPAC shareholders have a 28 percent stake of the pro-forma ownership at closing, with FPA investors holding 5 percent.
Cheng said Lanvin Group executives first met Primavera chairman, CEO, and chief financial officer Max Chen in May 2021, and they saw an opportunity to tap into its “deep insights on consumer segments accumulated in Asia and globally,” and a partner that shared its vision of “innovation and digitalization.”
As for the choice of exchange for the listing, she said: “New York is not only a financial hub, it’s also a fashion city.”
For his part, Chen lauded the special-purpose acquisition company as a vehicle to an IPO. “If done with the right partner, and structured properly, SPACs can be a very bespoke and streamlined way for world-class companies to go public, and I think Lanvin Group is a great example.”
He noted that Primavera is also working with its partner ABCI to sponsor a SPAC to be listed on the Hong Kong Stock Exchange.
Previously known as Fosun Fashion Group, the firm changed its name in October, when Lanvin Group scored a valuation of better than $1 billion with investments from Japan’s Itochu Corp., Chinese footwear maker Stella International and private equity player Xizhi Capital.