French fashion house Lanvin is in discussions with several investors to sell a majority stake, and must conclude a deal soon or risk a liquidity crisis, WWD has learned.
Among the potential buyers is Mayhoola Group, according to an industry source. In recent years, the Qatari investment group that controls Valentino and Balmain has reportedly held several rounds of discussions with Taiwanese media magnate Shaw-Lan Wang, majority owner of Lanvin. Nothing has been signed, and other potential buyers are said to be in the mix.
“There are indeed people circling around Lanvin,” said a second source. “There is movement because the company is running out of money. The situation is pretty bad in the sense that the turnover continues to decrease and therefore the company is losing more and more money, and so something needs to be done, and I think everybody’s woken up to that.”
A third source added: “It’s turning into a sort of auction. Each [potential buyer] is naming their price.” Nonetheless, several of the sources noted that Wang has been reluctant to sell in the past, making difficult any predictions about the outcome of the process.
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A spokeswoman for Lanvin declined to comment. Officials at Mayhoola could not be reached.
Wang said in November that she would inject fresh funds into Lanvin before the end of 2017 amid reports that an auditor had issued a warning over the label’s financial situation. However, the promised funds have yet to materialize, as have unspecified alternative solutions subsequently touted by management.
Mayhoola is said to have expressed interest prior to its 2016 acquisition of Balmain, but balked at the price Wang was seeking, said to be in the neighborhood of 500 million euros ($664 million).
Kering is said to have considered an acquisition of Lanvin, but decided against it because of the high level of investment required to restore the house to financial health, a fourth source said. The French group has said repeatedly it is not in the market for acquisitions, and would rather focus on organic growth.
Michael Kors Holdings, eager to build a stable of luxury brands after last year’s purchase of Jimmy Choo, is said to have kicked the tires in recent months, but withdrew its interest.
Wang, who owns a 75 percent stake in Lanvin, last year brought back Nicolas Druz — who briefly headed the company in 2001 — as chief executive officer.
The house has struggled to find its footing since dismissing creative director Alber Elbaz in October 2015, following disagreements between the designer and Wang over the company’s direction. Elbaz catapulted the brand’s notoriety during his 14-year tenure.
In July last year, Bouchra Jarrar exited her position as creative director of the house’s women’s collections after just two seasons. She was replaced by Olivier Lapidus, a relative unknown, whose debut collection, shown during Paris Fashion Week in September, received mostly poor reviews.
Following his appointment, minority shareholder Ralph Bartel and investment banker Pierre Mallevays of Savigny Partners, both board members, submitted letters of resignation to disassociate themselves from Wang’s decisions and governance.
Bartel is believed to be keen for the company to receive fresh investment under a new majority shareholder. Bartel and Mallevays declined to comment on a potential acquisition.
Lanvin responded in December to media reports about its future with “astonishment,” saying the speculation “deeply hurts” the company and its staff.
“The house is going through a difficult time but has no debts, has always paid its employees and suppliers, and is working actively and optimistically on its future,” the company said. Lanvin plans to stage a runway show on Feb. 28 to showcase its fall collection designed by Lapidus.
The oldest French fashion house still in activity has seen sales erode since a peak of 235 million euros in 2012. In 2016 revenue fell 23 percent to 162 million euros, with a net loss of 18.3 million euros, marking its first red ink in nearly a decade, with expectations of deeper losses for 2017.
According to industry sources, orders for women’s collections have been falling at a steep double-digit rate. The brand has also struggled to build a handbag business, a chief pillar for most European fashion firms.
There is uncertainty also over a potential settlement with Elbaz, who at the time of his departure held an ownership stake in Lanvin via a holding controlled by Wang. Elbaz is said to have remained in touch with Mayhoola and met with principals there in recent weeks; however, it is not clear if he is attached to the Middle Eastern group’s Lanvin bid.
