Fosun takes control of French fashion house Lanvin
Fosun International announced on Thursday that it had acquired a controlling stake in the 129-year-old French fashion house Lanvin, joining other Chinese companies that have recently bought top brands to capitalise on the demand for luxury products from wealthy mainlanders.
Fosun did not disclose financial details of the deal, but said Lanvin’s current shareholders would retain a minority stake.
“Fosun’s understanding of the brand and strong track record in the European and global market, including their successful partnership and transformational strategies with Club Med, Tom Tailor and many others, make us believe that Fosun is the right long-term strategic partner to team upwith,” said Nicolas Druz, chief executive of Lanvin.
Founded by Chinese billionaire Guo Guangchang in 1992, Fosun went into aggressive overseas expansion and investment starting in 2010, and now owns French luxury resort operator Club Med, a 9.5 per cent stake in jewellery and fashion accessories brand Folli Follie and a minority stake in entertainment company Cirque du Soleil. It also has a joint venture with global travel company Thomas Cook.
“Not all brands can go through more than a century’s time and still shine and be admired like Lanvin. We feel honoured to become its new partner and believe this globally renowned brand and its rich history has tremendous growth potential,” said Guo, who is also chairman of Fosun International.
Joann Cheng, vice-chief financial officer of Fosun, said: “As China becomes the main growth driver of the global luxury market, we are confident that Fosun can bring great incremental value to Lanvin with our global resources and expertise, while being absolutely committed to Lanvin’s high luxury positioning and its exceptional quality of products manufactured in France and Italy.”
The acquisition comes as the interest of Chinese companies towards foreign luxury brands has been on the rise. Chinese textile giant Shandong Ruyi recently agreed to buy a controlling stake in Swiss luxury shoe and accessories firm Bally. In April 2016 it bought a controlling stake in French fashion retailer SMCP for €1.3 billion (US$1.6 billion) in one of the largest overseas acquisition deals in China’s fashion industry.
Lanvin has struggled financially as sales declined after the departure of its star designer Alber Elbaz in 2015, according to Reuters. The French fashion label said in November last year that Taiwan-based media magnate Shaw-Lan Wang, who controls 75 per cent of the company, would inject more money into it, but then in December said it was looking at other options that did not involve a capital increase.
Zhou Ting, director of Fortune Character Institute, a Shanghai-based market research firm, said that for Lanvin to be successful, Fosun should not worry too much about the financials right now.
“One of the major shortcomings at Lanvin is that its design and management team has not been stable, so Fosun will need to hire a high quality management team for the company instead of only wanting to reap financial rewards from the brand,” she said.