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This week, fashion is going to experience something it hasn’t done in a long time: an IPO. The Lanvin Group, which owns Sergio Rossi, Wolford, St. John and Caruso in addition to its eponymous brand, listed Thursday on the New York Stock Exchange through a special-purpose acquisition company. The road to the IPO was not entirely smooth: Lanvin had to cut its valuation from $1.25 billion to $1 billion in October, citing economic headwinds. But the group’s parent company, China-based Fosun International, is betting investors want greater exposure to the luxury sector, which time and time again during the pandemic has proven the most resilient slice of the fashion market.
That’s true in a general sense (although there are signs that even wealthy consumers might be limiting their spending a bit). The question that will be answered once shares start trading is whether the market thinks the Lanvin Group is well positioned to capitalize on the luxury boom. Over the past 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, as well as a more robust online presence. The Lanvin Group has been successful in attracting design and management talent, particularly from Lanvin and Sergio Rossi, and says the business will be profitable by 2024. But a China-focused growth strategy will depend on fluidity with which the country will exit from its Zero Covid policy.
Lanvin’s IPO raises the tantalizing possibility that the fashion IPO drought is over. No fashion company has gone public in America this year (the industry is not unique; there were only 97 U.S. IPOs in the third quarter, compared to 723 in 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 fallen about 15%; digital start-ups listed around the same time lost 80% or more.
All that means is that many fashion brands are unlikely to follow Lanvin on the stock market, at least not until inflation is brought under control and the economy picks up. The exception likely to prove the rule is Prada, which is setting the stage for a second $1 billion Milan listing next year.
What else to watch this week
Monday
Jacquemus fashion show in Paris
Tuesday
UK unemployment data for October, US inflation reading for November
Wednesday
Inditex reports third quarter results
UK inflation reading for November
The US Federal Reserve is expected to raise its key rate by 0.5 percentage points
Thursday
Lanvin goes public via SPAC
U.S. retail sales data for November
Friday
CR Runway Parade in Qatar
UK retail sales in November
The week ahead wants to hear from you! Send advice, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.
