Corporate Q&A

The French connection

CEO discusses why Fosun grouped all its fashion assets under Lanvin brand


In fashion: Lanvin’s Joann Cheng

When Fosun International purchased European couture house Lanvin (see WiC400) in 2018, many questioned whether the Shanghai-based conglomerate could revive France’s third-oldest fashion brand. Three years on, Fosun has added a number of new Lanvin stores. And in what is seen as the strongest sign of its commitment to the French brand yet, Fosun also rebranded its entire fashion unit as Lanvin Group this week.

The move followed the completion of a Series B financing round, which saw Japanese trading house ITOCHU, Hong Kong-listed footwear maker Stella International, and Chinese private equity firm Xizhi Capital become strategic partners.

The deal almost doubled the funds raised by Lanvin in recent times to $300 million and gave the new fashion group a valuation of more than $1 billion. Its expanding portfolio of brands includes Sergio Rossi (see WiC546), Wolford, St. John Knits and Caruso, offering more than a 1,000 points of sale across 60 countries.

This week WiC met Joann Cheng, chairwoman and CEO of Lanvin, who joined Fosun after following previous roles as CFO of DJI Innovation and finance director of TPG and GE Capital Group Greater China. She told us more about the rebranding effort, as well as Lanvin’s plan for China’s luxury market.

What’s the rationale for rebranding Fosun Fashion into Lanvin Group?

When we rebranded into Lanvin, we’d like to let everyone know that we are targeting the luxury segment of the fashion industry. We also want to highlight that the vision and values of Lady Jeanne Lanvin – who started her business 132 years ago – still course through our group. We too foster entrepreneurship, creativity, openness and a very positive culture.

Of course, rebranding also signifies that we’ve turned a new page. In this case it marks the closure of our round B equity financing and the establishment of the strategic alliance with ITOCHU and Stella International as we embark on a new phase of growth.

How did this partnership come about?

The strategic partnership provides a great opportunity for us to set up an ecosystem for all the brands. It will aid us in many ways beyond the supply of capital. For example, ITOCHU, with its extensive network of retail stores in Japan, will help us penetrate the Japanese market, where most of our brands, except for Sergio Rossi [an upmarket shoemaker], have a rather insignificant presence at present. Despite being one of the world’s oldest and largest luxury markets, Japan is in fact an emerging market for us.

As for Stella International – an established footwear maker with integrated capabilities in design, product development and manufacturing – we are looking to tap its deep experience and knowhow to drive our growth in the China market and complement our product capability in luxury sneakers.

How will Lanvin deploy the fresh funds raised? Will you focus more on organic growth or mergers and acquisitions?

We keep our allocation fluid so that we can seize the best opportunities. Part of the funds will definitely go towards investing in our current portfolio, which means helping our brands explore more product categories, roll out more retail stores, and enter new markets.

We very much focus on operations, which is something that really creates value for all our portfolio brands.

That said, we still have an investment team based in Shanghai, New York and Frankfurt to keep an eye on all the M&A opportunities in the market that might drive inorganic growth.

Regarding M&A, what kind of brands or companies are attractive to Lanvin? What are you looking to add to your portfolio?

Based on our track record you can see that we are really fond of brands with strong heritage, fine craftsmanship, creativity and deliverable designs. However, we don’t limit ourselves to historical brands. With our strategic partners, we will be able to support young designers every step of the way – from design and manufacturing into distribution.

We’re also interested in fashion technology and sustainable practices. We keep an open mind on M&A activity as long as the prospective targets are in line with our goal of building a healthy and sound ecosystem in the fashion industry.

Who are the other partners within your ecosystem?

Before the most recent financing round, we already had some reliable partners such as New World Development’s K11, which is helping our distribution channel buildout across its network of luxury shopping mall destinations.

We also had Baozun, the leading e-commerce business partner for fashion brands in China. They’ve set up a working team with us to explore omnichannel distribution solutions for all of our brands.

We’ve also worked with Activation Group, which is very experienced in helping luxury brands connect with local audiences through digital marketing solutions and events. Our signature fashion show last October at Yu Garden in Shanghai was organised by them.

Neo-Concept Group, a fabric developer focusing on sustainability, is also a very good partner of ours.

Do you also work with other subsidiaries of Fosun?

Yes, there has been a lot of collaboration with different units of Fosun. For example, the Yu Garden show I’ve just mentioned was hosted in a venue run by the Shanghai Yuyuan Tourist Mart, which is majority controlled by Fosun. It owns the 400 year old garden, allowing us to become the first brand to do a show in such a historical place. The collaboration allowed us to create a wonderful event and grab a lot of attention from the industry.

Another example: two weeks ago we opened a pop-up store at Atlantis Sanya [a sail-shaped luxury resort that Fosun built with an investment of $1.74 billion]. It attracted a lot of traffic as families were spending their holidays there. The campaign promoted brand recognition and sales. So yes, the ecosystem within the Fosun family is very helpful and unique.

Over the past 15 months, Lanvin Group has opened 25 new stores globally, of which 19 are in Greater China. Is that your biggest market?

Not really. By the end of last year China only accounted for 10% of our group’s revenue. Europe made up over 50%, followed by the US.

We added most stores in China last year partly because it is still heavily underpenetrated, and partly because it had shrugged off the impact of Covid-19 much earlier than the rest of the world.

It has been very difficult to open new stores in overseas markets that have gone into lockdowns for lengthy periods. But I’d like to emphasise that Europe and the US are still important to us and we’ll try our best to keep those markets strong and vibrant. After all, growth in Asia is predicated on the strength of those markets.

But is China your fastest growing market?

Absolutely. The Chinese people are major consumers of luxury goods. A report by Bain, a consulting firm, a year ago forecast that around 50% of luxury sales worldwide would come from the Chinese until at least 2025. The figure covered not only domestic shoppers, but also outbound tourists as the Chinese tend to shop for luxury products when travelling abroad.

Given that international travel restrictions are still largely in place, domestic consumption in China will remain as a major driver of the luxury market. Look no further than Hainan, where its duty-free shopping malls have been extremely crowded since last year.

Can you highlight some of the key characteristics of China’s luxury fashion market? How is it different from the rest of the world?

Luxury fashion is actually a global business. That means we sell the same merchandise and maintain the same standard of service across the globe. Our brand equity also has to be very consistent across the world.

That said, China does have its own uniqueness, especially the emphasis on digitalisation – and even more so in the post-Covid era.

China is at the forefront of e-commerce development and there are a wide range of online sales platforms in the country including Tmall,, Douyin [known as TikTok elsewhere] and Xiaonhungshu [known in English as Little Red Book]. That makes having an omnichannel strategy of utmost importance in the Chinese market. Sales conversion sometimes take place in physical stores, and sometimes online. There’s no clear line between online and offline.

Has Lanvin revised its business plan in the light of the new emphasis on ‘Common Prosperity’?

Common prosperity in the long run will encourage economic mobility and economic growth. Popular demand for quality products and beauty is natural. I don’t see how the Common Prosperity policy should significantly impact our business strategy.

Does Lanvin’s European heritage still give it a competitive advantage in China, given that younger consumers are gravitating towards homegrown brands?

I think the fashion market is big enough to cater to different demands and customers. It is true that every brand wants to attract the younger generations, who represent the future. In 2019 we hired Bruno Sialelli, who is just 32, as our creative director. His designs are youthful, easy-to-wear and fashionable, which has helped drive a lot of young customers to Lanvin.

Is Lanvin profitable and is the rebranding a step towards an IPO?

Unfortunately we can’t disclose our financial details. In the short term, we will continue to prioritise brand equity over profitability. While keeping the DNA of our brands strong and healthy, we’ll look for growth through deeper penetration in emerging markets and invest in digital platforms to enhance our omnichannel capabilities. We also want to explore categories such as sportswear and yogawear as the younger generation loves being active. Fosun International has a good track record in creating consumer-driven ecosystems and its high-growth segments do tend to go public. At the moment we’re relying on equity financing to build our capital strength but we’re open to other possibilities. Ultimately we have a long-term commitment to the brands we own, and also to Fosun.

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