Executive Summary / Key Takeaways

• Lanvin Group is undergoing a significant strategic transformation, revitalizing its portfolio of luxury brands through new creative leadership and aggressive operational efficiencies amidst a challenging global luxury market.
• The company is targeting group-level cash breakeven by 2025, a revised goal from its earlier 2024 adjusted EBITDA breakeven target, reflecting proactive adjustments to persistent macroeconomic headwinds.
• Despite a 22% year-on-year revenue decline in the first half of 2025, the second quarter showed encouraging sequential recovery across several brands, including a 46% quarter-over-quarter D2C revenue growth for Lanvin and a 16% increase for Sergio Rossi.
• Strategic investments in new artistic directors for Lanvin (Peter Copping) and Sergio Rossi (Paul Andrew) are expected to be key drivers for renewed growth momentum in the second half of 2025, supported by targeted marketing and retail optimization.
• The group's focus on enhancing its U.S. digital platform, optimizing its retail footprint, and shifting towards higher-margin product categories like accessories and leather goods are critical to improving profitability and cash flow efficiency.

A Legacy Reimagined: Strategic Evolution and Brand Revitalization

Lanvin Group Holdings Limited (NYSE:LANV) stands as an Asia-based global luxury group, stewarding an esteemed portfolio of iconic brands including Lanvin, Wolford, Sergio Rossi, St. John, and Caruso. Established in 2018, the company embarked on a mission to build a robust ecosystem of strategic partners for production, distribution, and development, aiming to carve out a distinctive presence in the competitive global luxury market. This overarching strategy emphasizes long-term growth, strategic repositioning, operational efficiency, and enhancing brand desirability, particularly within fast-growing luxury markets such as Asia and North America.

The global luxury sector currently faces persistent macroeconomic and geopolitical uncertainty, alongside shifting consumer behaviors and significant challenges within the wholesale channel. In this dynamic environment, Lanvin Group positions itself as a niche player with a strong heritage appeal, differentiating itself through a diverse multi-brand portfolio. While larger conglomerates like LVMH (LVMUY) and Kering (PPRUY) benefit from greater scale and broader market influence, Lanvin Group leverages its brand diversity and operational agility. For instance, LVMH, with its extensive global distribution and iconic brands, typically demonstrates stronger revenue growth and profitability margins. Kering, known for its focus on creativity and sustainability, often leads in product performance enhancements like the adoption of sustainable materials. In contrast, Lanvin Group's strategy allows for more agile operational execution in targeted luxury segments, though it may trail in overall scale and the pace of innovation compared to its larger rivals.

Lanvin Group's technological differentiation is primarily operational and strategic, centered on leveraging digital platforms and data to enhance efficiency and market reach. The company's U.S. digital platform, for example, serves as a crucial backbone, centralizing logistics and improving the customer experience for all its brands in North America. This platform has already delivered tangible benefits, with St. John's e-commerce growing by 14% in 2023. Furthermore, Lanvin's successful launch of its marketplace model in the second quarter of 2025 drove a 46% increase in D2C revenue and a notable rebound in North America e-commerce. Wolford's digital sales also maintained a stable 19% of its revenue in 2023. These digital capabilities are vital for improving customer engagement and supporting higher-margin direct-to-consumer (D2C) sales, which are key strategic priorities.

Beyond digital infrastructure, the group actively pursues product innovation. In 2023, it established a fabric center with a strategic partner, aiming to improve product offerings and material sourcing. This initiative directly supports the development of differentiated products, such as Wolford's revolutionary W.O.W. Leggings, which drove an impressive 137% growth in the Leggings category in 2023, solidifying the W Collection. St. John is also updating its e-commerce platform to Shopify to enhance agility and the online experience. Lanvin Lab, an experimental space for cultural expression, has proven to be a dynamic international platform, generating interesting sources of revenue and cultural affinity with new demographics. These technological and operational advancements contribute to Lanvin Group's competitive moat by enhancing efficiency, supporting premium pricing, and strengthening brand desirability against rivals.

The company's journey has been marked by continuous evolution. After its founding in 2018, Lanvin Group achieved a 24% compound annual growth rate from 2020 to 2022. This period saw Sergio Rossi initiate a global retail expansion and Wolford undertake significant restructuring to become a full lifestyle brand. By 2023, despite macroeconomic headwinds, the group achieved €426 million in revenue, driven by milestones like the reacquisition of Lanvin's Japan license and the opening of its first Middle East boutique in Riyadh. Caruso notably achieved adjusted EBITDA breakeven in the first quarter of 2023. The year 2024 brought significant leadership transitions, including the appointment of Andy Lew as Executive President, Peter Copping as Artistic Director of Lanvin, and Paul Andrew as Creative Director of Sergio Rossi, signaling a new era of creative vision and strategic implementation.

Financial Performance: Resilience Amidst Headwinds

The first half of 2025 presented a challenging environment for Lanvin Group, with group revenue declining 22% year-on-year to €133 million, reflecting softer market conditions and planned creative transitions. This period saw a 400 basis point reduction in gross profit margin to 54%, primarily due to the sell-through of prior season inventory. Contribution profit margin and adjusted EBITDA margin also decreased by 7% and 14% respectively, with adjusted EBITDA falling to negative €52 million. However, these impacts were partially mitigated by rigorous cost discipline and aggressive G&A cost reduction measures across all brands.

Encouragingly, the second quarter of 2025 demonstrated clear signs of recovery. Lanvin's D2C revenue grew by 46% quarter-over-quarter, and Sergio Rossi's D2C revenue increased by 16% quarter-over-quarter. Wolford's gross profit margin expanded significantly by 1,673 basis points, and Caruso saw an 11% revenue growth quarter-over-quarter. These sequential improvements underscore the traction gained by the company's operational initiatives.

For the full fiscal year 2024, global revenue was €329 million, a 23% decrease from 2023, primarily due to broader industry trends and macroeconomic pressures in EMEA and Greater China. Despite this decline, the company maintained a stable gross margin of 56% through effective cost control and inventory management. G&A expenses were reduced by 15% year-over-year in 2024, contributing to a 14% cumulative savings in OpEx (marketing, selling, and G&A) over two years. Operating cash flow also improved by 32% from 2020 to 2024, driven by reduced inventory days and tighter receivable management. Net cash used in operating activities decreased from negative €81 million in 2022 to negative €59 million in 2024.

Brand-level performance highlights further illustrate the group's resilience. St. John demonstrated exceptional stability in the first half of 2025, with revenue remaining nearly flat and its core North American market growing by 4%. The brand maintained a stellar gross margin of 69%, supported by consistent full-price sell-through. Caruso's proprietary brand showed continued growth in order intake in H1 2025, with its gross profit margin remaining resilient at 29%. Lanvin's G&A expenses in H1 2025, while up year-on-year due to strategic creative development investments, were still 15% lower than H1 2023, indicating underlying efficiency improvements.

Outlook and Strategic Imperatives: Charting the Future

Lanvin Group's management expresses confidence that the foundational work completed in the first half of 2025, particularly with new creative leadership, positions the company to capture demand as market conditions improve. The company is now re-looking for a cash breakeven at a group level by 2025, a revised target from its earlier 2024 adjusted EBITDA breakeven goal, primarily due to unforeseen macroeconomic headwinds that began in the second half of 2023. Despite this adjustment, Caruso achieved adjusted EBITDA breakeven in Q1 2023, and management anticipates two additional brands will reach this milestone in 2024.

The strategic priorities for the remainder of 2025 are clear and action-oriented. The group aims to strengthen brand leadership, drive efficiency by streamlining operations and optimizing its retail footprint, protect free cash flow through disciplined working capital management and rigorous cost control, and deploy targeted marketing initiatives. The highly anticipated collections from Peter Copping at Lanvin and Paul Andrew at Sergio Rossi are expected to be powerful catalysts for renewed growth momentum in the second half of 2025. Lanvin's initiatives for the second half include global integrated marketing campaigns, targeted social media and e-commerce activations, and in-store clienteling events, with savings reinvested into product innovation and strategic digital partnerships.

Wolford plans to celebrate its 75th anniversary in the second half of 2025 with a dedicated brand push focusing on essentials and exploring expansion opportunities in emerging markets like the Middle East and APAC. Sergio Rossi's second half will be transformative, leveraging Paul Andrew's new collection to expand wholesale, drive cost control, and make a targeted push into the U.S. market. St. John will refine its channels to improve conversions, stimulate e-commerce, and optimize its supplier mix to mitigate geopolitical risks. Caruso will support the relaunch of its Maison lines and acquire new wholesale accounts in expanding markets such as the U.S.A., Benelux, and DACH.

The group's strategic repositioning also involves a proactive decision to advance across geography and product assortment. There is a growing focus on the accessory and leather goods business, with a dedicated division created for this category, aiming to drive higher gross profit margins with less seasonal and ready-to-wear products. The company is also highly selective with wholesale partners, prioritizing the D2C model (retail and dot-com business) to yield better gross profit margins. These overarching strategies, combining revenue building and cost rationalization, are expected to lead to positive EBITDA and cash flow within the next 18 months.

Risks and Challenges

Lanvin Group operates within a luxury market susceptible to persistent global macroeconomic and geopolitical uncertainty, which has already tempered performance across several brands. The wholesale channel continues to face significant headwinds, particularly in EMEA and Greater China, impacting revenue across the portfolio. Creative transitions, while strategic, carry the inherent risk of customer acceptance of new collections, which could affect sales momentum. Operational challenges, such as the third-party logistics transition issues that impacted Wolford in 2024 and H1 2025, highlight supply chain dependencies that can disrupt performance.

The company's smaller scale compared to luxury giants like LVMH and Kering could lead to higher costs and lower margins, making it challenging to match their pricing strategies and R&D investments. Indirect competitors, including fast-fashion retailers and e-commerce platforms, pose a threat by offering lower-priced or more agile, trend-driven alternatives, potentially eroding market share in price-sensitive segments. However, management's proactive measures, including aggressive cost reduction, retail footprint optimization, and strategic investments in brand leadership and digital capabilities, are designed to mitigate these risks and position the group for a stronger future.

Conclusion

Lanvin Group is at a pivotal juncture, undergoing a comprehensive strategic transformation to revitalize its luxury brands and forge a clear path to profitability. Despite significant macroeconomic headwinds and a challenging global luxury market, the company's commitment to new creative leadership, aggressive operational efficiencies, and targeted market expansion is beginning to yield encouraging results. The sequential recovery observed in the second quarter of 2025, coupled with a clear roadmap for the launch of highly anticipated collections and continued cost discipline, underscores the potential for renewed growth momentum.

The group's strategic focus on enhancing its digital platforms, optimizing its retail footprint, and prioritizing higher-margin product categories like accessories and leather goods are crucial for improving financial health and cash flow efficiency. While the revised target for group-level cash breakeven by 2025 acknowledges external pressures, the underlying operational improvements and brand-specific successes, such as St. John's resilience and Caruso's profitability, demonstrate the strength of its multi-brand portfolio. Lanvin Group's ability to leverage its heritage, adapt to competitive dynamics, and strategically invest in its future positions it as a compelling long-term investment for those seeking exposure to a luxury powerhouse undergoing a determined revitalization.