This week fashion will experience something it hasn’t in a while: an IPO. Lanvin Group, which owns Sergio Rossi, Wolford, St. John and Caruso in addition to its namesake brand, is listing on the New York Stock Exchange via a special purpose acquisition company on Thursday. The road to going public hasn’t been entirely bump-free: Lanvin had to reduce its valuation from $1.25 billion to $1 billion in October, citing economic headwinds. But the group’s parent, China’s Fosun International, is betting investors are eager for more exposure to the luxury sector, which time and again during the pandemic has proven the most resilient slice of the fashion market.
That’s true in a general sense (though there are signs even wealthy consumers may be reining in spending a bit). The question that will be answered once shares begin trading is whether the market believes Lanvin Group is well-positioned to capitalise on the luxury boom. Over the last five years, Fosun has cobbled together a group of well-established but faded European luxury brands. The plan is to revive them with fresher designs and expansion into new markets, particularly in Asia, plus a more robust online presence. Lanvin Group has succeeded in attracting design and executive talent, particularly at Lanvin and Sergio Rossi, and says the business will be profitable by 2024. But a China-focused growth strategy will depend on how smoothly the country transitions out of its Zero Covid policy.
Lanvin’s IPO raises the tantalising possibility that fashion’s IPO drought may be over. No fashion company has gone public in America this year (the industry isn’t unique; there were just 97 US IPOs through the third quarter, compared with 723 over the same period in 2021, according to PwC). It’s no coincidence that the last IPO before Lanvin’s was Zegna, another European luxury house with a multi-pronged plan to evolve its tired brand. In turbulent times, investors want blue chip brands that are profitable, or at least have a clear path to profitability. In the year since Zegna went public its shares have dipped about 15 percent; the digital start-ups that listed around the same time are off 80 percent or more.
All that means is that we’re unlikely to see many fashion brands following Lanvin onto the exchange, at least not until inflation is under control and the economy is growing again. The exception that’s likely to prove the rule is Prada, which is laying the groundwork for a $1 billion second listing in Milan next year.
What Else to Watch for This Week
Jacquemus shows in Paris
UK unemployment data for October, US inflation reading for November
Inditex reports third-quarter results
UK inflation reading for November
The US Federal Reserve is expected to raise its benchmark interest rate by 0.5 percentage point
Lanvin goes public via SPAC
US retail sales data for November
CR Runway fashion show in Qatar
UK retail sales for November
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