Lanvin Group Posts Record Sales

• Revenues of €422 million for FY2022, a 37% increase over FY2021
• Margin profile improvement with Group gross profit margin increasing to 56% and both contribution profit⁽¹⁾ and adjusted EBITDA margins steadily improving
• All portfolio brands delivered revenue growth; Group revenues increased in all channels and geographies
• Flagship brand Lanvin had strong growth of 64% YoY and showed improvement in gross, contribution profit, and adjusted EBITDA margins
• Implementation of balanced global growth strategy resulted in 39% growth in EMEA, 36% growth in North America, and 15% growth in Greater China, despite COVID impact
• Ongoing implementation of strategic plans in 2023 to drive further revenue growth and margin improvement to achieve breakeven in FY2024

Lanvin Group (NYSE: LANV, the “Group”), a global luxury fashion group with Lanvin, Wolford, Sergio Rossi, St. John and Caruso in its portfolio of brands, today announced its results for the full-year 2022.  The Group achieved revenues of €422 million, a 37% increase year-over-year versus 2021; and gross profits of €238 million, representing a 56% gross margin and a 40% increase versus 2021.

Joann Cheng, Chairman and CEO of Lanvin Group, said: “We are pleased with the progress we made in 2022. Not only did we achieve record revenues, we also made great strides in improving our cost structure and streamlining our operations. Our progress in 2022 has laid a strong foundation for 2023, and notwithstanding current macroeconomic conditions, we remain optimistic for the current year, especially with the continued resurgence of Greater China.”

Review of the Full-Year 2022 Results

Selected Highlights

Strong growth achieved at all brands and in all channels and regions: All five brands showed year-over-year growth. Lanvin, the Group’s flagship brand, grew global revenue by 64%, with record 145% growth in its Wholesale business, and 27% growth in its DTC business. Additionally, revenues in each of the Group’s regions and channels showed strong growth, with EMEA and North America growing 39% and 36%, respectively. Of note, Greater China, hampered by the pandemic, grew by 15%.

Continued positive progress with margin profile: Margins at all levels, Gross, Contribution, and Adjusted EBITDA all saw improvement in 2022. Gross margins increased to 56% and Adjusted EBITDA as a percent of sales has increased by an impressive 23 points since 2020. Operational improvement strategies implemented in 2022 began to show results in the second half of the year, resulting in continued margin profile improvement that will have significant impact in 2023.

Refocused brand and product strategies showing results:  One of the main drivers of growth in 2022 was the refocus of brand strategies and optimization of product categories and mix. New product lines and categories, collaborations, and a focus on accessories all impacted the growth and margins. Furthermore, improving digital engagement as a part of the overall strategy succeeded in attracting new and younger customers.

Digital strategies successfully initiated: Digital marketing had a strong effect on the 2022 results with the brands increasingly attracting new and younger demographics. In the second half of 2022, the Group established a shared digital platform with a North American partner to distribute the Group’s brand online. Sergio Rossi and Lanvin have already successfully transitioned their North American eCommerce to this platform, which is expected to bring further growth to the brands in the coming years.

Significant progress optimizing store network: The Group successfully launched 47 new retail doors, systemwide. Improved store strategies implemented in 2022 have improved the unit economics, with the Group’s whole network of retail doors achieving double-digit growth on a like-for-like basis. Additionally, the Group with the brand-level management teams worked aggressively to cull the network, including closing 49 underperforming stores throughout its network. These initiatives provide a strong foundation for physical footprint growth in 2023 and beyond.

Review of FY2022 Financials

Revenues

For FY2022, the Group generated revenues of €422 million, a 37% increase year-over-year. All brands showed strong growth with Lanvin leading the way with a 64% increase year-over-year. The DTC and Wholesale channels grew by 32% and 41%, respectively. The Group maintained its strong growth trend with a compound annual growth rate of 38% since 2020. Full details of the Group’s revenues can be found in our Annual Report on Form 20-F for the year ended December 31, 2022

Gross Profit

Gross profit increased to €238 million, representing a 56% margin versus €170 million in 2021 at a margin of 55%, a year-over-year growth of 40%. Gross profit has more than doubled since 2020, when the Group had €117 million at a margin of 53%. The Group has continued to improve its margin profile through its brand-level operational initiatives.

Contribution Profit⁽¹⁾

The Group uses a measure, internally, called contribution profit, defined as gross profit less selling & marketing expenses to gauge the variable profitability performance and analyze the improvements at our brands. Contribution profit for the year was €13 million, an improvement of €9 million from 2021, the first year of positive contribution profits, and a tremendous increase from 2020 when it measured negative €34 million.

Adjusted EBITDA

Adjusted EBITDA remained at loss for 2022, but as a percentage of sales, continued to improve going from (40%) in 2020 to (19%) in 2021 and (17%) in 2022.

Profit Results by Segment

Lanvin: Gross profits increased to €61 million, at a margin of 50%, from €34 million, at a margin of 47%, in 2021. Gross profit improved from higher sell-through rates in all product categories as well as increasing economies of scale. Contribution profits continued to improve going from a contribution loss of €24 million in 2021 to a contribution loss of €15 million in 2022 with the percentage of sales improving 20 points year-over-year from negative 33% to negative 13%.

Wolford: Gross profits increased to €86 million from €79 million, in 2021. Margins declined slightly due to materials inflation as well as production personnel costs increasing from furloughed employees returning to work at higher wages. Contribution profits fell to €4 million from €20 million mainly driven by non-recurring expenses. These include legacy operational improvement consulting fees charged in the first half of the year, prior to the new management team taking over in the second-half of 2022, as well as a cyberattack in December 2022 at a third-party logistics provider that disrupted deliveries during the peak holiday season.

Sergio Rossi: Sergio Rossi was acquired in July 2021. Since then, gross margins increased from 46% to 50% in 2022. Gross margins improved from an increased proportion of higher-margin DTC sales. Contribution margins declined slightly in 2022 from 13% to 11% due to higher investments in personnel, marketing and rental expenses.

St. John: St. John’s margin profile improved dramatically with gross profit growing from €39 million to €53 million in 2022; with margins increasing from 53% to 61%. Contribution profits also increased from €1 million to €10 million; margins increased from 2% to 12%. St. John represents the culmination of the Group’s brand-level strategic planning with many of its initiatives nearing completion and bearing results.

Caruso: Caruso continued its strong, steady performance with its gross profits increasing from €4 million to €7 million in 2022, and margins increasing from 18% to 23%. Contribution profits also increased from €3 million to €6 million, and contribution margins increased markedly from 13% to 18%. Caruso leveraged higher sales from new accounts and deeper penetration with current customers to increase its profitability through economies of scale coupled with better management of factory labor costs as well as selling and marketing expenses.

2023 Outlook

Notwithstanding the continuing macroeconomic issues, the Group expects to maintain its 2022 momentum into 2023 and achieve solid margin improvement as the year progresses.

Many of the “nuts and bolts” initiatives started in 2022 will reach completion in 2023 resulting in continued margin improvement. Additionally, a significant portion of the store optimization has taken place and while the Group will continue to enhance its retail network in 2023, we believe the foundation is in placed to opportunistically grow its footprint.  The Group remains on track for breakeven profitability in FY2024.

The Group is built upon a collaborative eco-system and continues to work with their strategic partners to build the platform. As such, the Group continues to seek and review potential new investment and acquisition opportunities to further enhance its brands and platform.

Annual Report on Form 20-F

Our annual report on Form 20-F, including the consolidated financial statements for the fiscal year ended December 31, 2022, can be downloaded from the Company’s investor relations website (ir.lanvin-group.com) under the section Financials / SEC Filings, or from the SEC’s website (www.sec.gov).

Conference Call

As previously announced, today at 8:00AM EST/8:00PM CST/2:00PM CET, Lanvin Group will host a conference call to discuss its results for the full-year 2022 and provide an outlook for 2023. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, please visit the “Events” tab of the Group’s investor relations website at https://ir.lanvin-group.com. To participant in the conference call, please dial into the following numbers:

United States Toll Free: 1-888-346-8982
International: 1-412-902-4272
Mainland China Toll Free: 4001-201203
Hong Kong Toll Free: 800-905945
Hong Kong-Local Toll: 852-301-84992
Singapore Toll Free: 800-120-6157

A replay of the conference call will be accessible approximately one hour after the live call until April 27, 2023, by dialing the following numbers:

US Toll Free: 1-877-344-7529
International Toll: 1-412-317-0088
Canada Toll Free: 855-669-9658
Replay Access Code: 3267257

A recorded webcast of the conference call and a slide presentation will also be available on the Group’s investor relations website at https://ir.lanvin-group.com.

Next Scheduled Announcement

The next scheduled announcement will be the H1 2023 earnings results release in August 2023. To receive email alerts of the timing of future financial news releases, as well as future announcements, please register at https://ir.lanvin-group.com.

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