Photo by Elise HARDY/Gamma-Rapho via Getty Images
Lanvin, the Paris-based French luxury brand, made its debut on the New York Stock Exchange Thursday under the ticker LANV, an event some 134 years in the making since its founding in 1889.
- In a strong showing, its shares are up nearly 47% to $14.55 in morning trading.
Why it matters: In an arid IPO market, how investors respond to the offering will be instructive for the year ahead.
Be smart: The public market may be strained, but the luxury goods sector is booming in 2022 with the sale of personal luxury goods projected to increase 22%, per Bain & Co.
Flashback: Earlier this year, Lanvin and its China-based parent, Fosun International, agreed to merge with and go public via SPAC Primavera Capital Acquisition Corporation (NYSE: PV).
- The deal valued the French luxury label at an enterprise value of $1.5 billion at the time.
- Earlier this week, the two companies said that deal was approved by Primavera shareholders at a shareholder meeting on Dec. 9.
Details: Lanvin proceeded with its plan to go public even as others either delayed or backed out of their own IPOs because the luxury group was confident investors would value the business on its own merits and see the overall growth of the luxury market, says Joann Cheng, Lanvin's CEO.
- For Lanvin, "an IPO is not a purpose, it's a milestone," she tells Axios.
- It also considered the traditional IPO route, but Primavera had a solid reputation and group of investors behind it, Cheng says.
- In addition, a New York IPO gave it brand exposure in one of the world’s fashion capitals and a gateway to the U.S. marketplace.
Meanwhile, she went on to note the company has raised $150 million in fresh capital, which will largely be invested in its existing businesses.
- That includes the brands Sergio Rossi, Wolford, St. John Knits and Caruso in addition to Lanvin.
- It also entails expanding its retail footprint, adding new product categories and increasing its digital presence, Cheng says.
What's next: While it's in no rush to do so, Lanvin also plans to build a pipeline for future acquisitions, Cheng says.
- But buys would not be of brands that compete with its existing businesses, Cheng says.
- Instead, the company would target categories such as leather goods and young urban brands to attract a more youthful demographic, she says.
By the numbers: For the six months that ended June 30, Lanvin said revenue grew 73% year over year to €202 million.
- To be fair, Cheng says that the growth is off a fairly low revenue number.
The bottom line: "There's lots of low-hanging fruit," Cheng says, without investing in its business or making acquisitions.
- She emphasized the biggest misperception was that Lanvin is a Chinese company when it's actually a truly global luxury group.
