This week fashion will experience something it hasn’t experienced in a long time: an IPO. Lanvin Group, owner of Sergio Rossi, Wolford, St. John and Caruso as well as its namesake brand, will list on the New York Stock Exchange through a special purpose acquisition company on Thursday. The road to going public hasn’t been entirely without bumps: 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’s Fosun International, is betting that investors are eager for more exposure to the luxury sector, which time and again during the pandemic has proven to be the most resilient part of the fashion market.
That’s true in a general sense (although there are signs that even wealthy consumers may be reining in their spending a bit). The question that will be answered once the shares start trading is whether the market believes 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 Asia, as well as a stronger online presence. Lanvin Group has managed to attract executive and design talent, particularly in Lanvin and Sergio Rossi, and says the business will be profitable by 2024. But a China-focused growth strategy will depend on how well the country emerges from its Zero Covid policy.
Lanvin’s IPO raises the tantalizing possibility that fashion’s IPO drought is over. No fashion companies have gone public in the US this year (the industry is not unique; there were only 97 US IPOs through the third quarter, compared with 723 during the same period in 2021, according to PwC). Not coincidentally, the last IPO before Lanvin 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, like Zegna is, or at least have a clear path to profitability. Zegna shares are trading slightly above their IPO price today; some of the digital startups that listed at the same time are 80 percent off or more.
All that means is that we’re unlikely to see many fashion brands following Lanvin on the exchange, at least not until inflation is under control and the economy is growing again. The exception that probably proves the rule is Prada, which is laying the groundwork for a second $1 billion listing in Milan next year.
Editor’s Note: This article was revised on December 11, 2022. An earlier version indicated that Zegna’s shares had fallen since its IPO. It is trading above its debut price.
What else to watch this week
Monday
Jacquemus shows 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 increase its benchmark interest rate by 0.5 percentage points
Thursday
Lanvin goes public via SPAC
US retail sales data for November
Friday
CR Runway Fashion Show in Qatar
UK retail sales for November
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Source: news.google.com