In the past year, Lanvin Group has achieved exceptional sales growth and margin improvements, experiencing a 37% increase in revenue. Although the group is still operating at a loss, it is confident that it is on the path towards profitability. In fiscal year 2022, Lanvin Group’s revenues reached a remarkable €422 million, with a gross profit margin of 56%. Notably, both contribution profit and adjusted EBITDA margins displayed steady improvement.
All of Lanvin Group’s portfolio brands witnessed revenue growth, with positive growth observed across all channels and geographical regions. The Lanvin label itself experienced an impressive 64% year-on-year revenue growth. The group’s global strategy implementation resulted in growth rates of 39% in EMEA, 36% in North America, and 15% in Greater China, despite the challenges posed by the Covid-19 pandemic. Both the direct-to-consumer (DTC) and wholesale channels saw notable growth rates of 32% and 41% respectively.
The gross profit for Lanvin Group increased to €238 million in 2022, representing a margin of 56%, compared to €170 million and a margin of 55% in 2021. This signifies a more than doubling of gross profit since 2020. However, the adjusted EBITDA remained negative in 2022, with a loss of nearly €72 million, albeit an improvement from a loss of almost €59 million in the previous year. Despite this, the adjusted EBITDA loss as a percentage of sales has steadily improved from -40% in 2020 to -19% in 2021, further reducing to -17% in 2022.
Contribution profit for the year amounted to €13 million, a notable improvement of €9 million from 2021 and a significant increase from a negative €34 million in 2020. Lanvin Group anticipates maintaining its positive momentum in 2023, with solid margin improvement expected throughout the year. Many initiatives launched in 2022 will be completed in 2023, leading to continued margin growth. The group has also optimized a substantial portion of its stores and plans to enhance its retail network further in 2023. The objective is to reach the break-even point in fiscal year 2024.
Analyzing the individual brands within Lanvin Group, Lanvin itself experienced a rise in gross profits from €34 million in 2021, with a margin of 47%, to €61 million in 2022, with a margin of 50%. This growth can be attributed to higher sell-through rates across all product categories and the realization of economies of scale. Despite still operating at a loss, contribution profits improved from a loss of €24 million in 2021 to a loss of €15 million in 2022.
Wolford, another brand under Lanvin Group, observed an increase in gross profits from €79 million to €86 million. However, margins slightly declined due to inflation in raw material costs and production personnel expenses. Contribution profit also dropped from €20 million to €4 million primarily due to one-off expenses.
Since its acquisition in July 2021, Sergio Rossi witnessed a boost in gross margins from 46% to 50% in 2022. Nevertheless, contribution margins saw a slight decrease from 13% to 11% due to higher investments in personnel, marketing, and rental costs.
St. John’s margin profile displayed significant improvement, with gross profit climbing from €39 million to €53 million, and margins increasing from 53% to 61%. Contribution profits also saw an increase from €1 million to €10 million.
Caruso showcased a strong and consistent performance, with gross profits rising from €4 million to €7 million, and margins increasing from 18% to 23%. Contribution profits also increased from €3 million to €6 million. The brand managed to leverage higher sales from new accounts and deeper penetration with existing customers, leading to improved profitability through economies of scale and better management of factory labor costs, as well as selling and marketing expenses.
Joann Cheng, Chairman and CEO, expressed satisfaction with the progress made in 2022. The company achieved record-breaking revenues and significant improvements in cost structure and operational efficiency. The advancements in 2022 have laid a strong foundation for 2023, and despite prevailing macroeconomic conditions, Lanvin Group remains optimistic, especially with the resurgence of the Greater China market.
Useful links:
1. Lanvin Official Website
2. Reuters
