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Things aren't looking good for Lanvin

By Kristopher Fraser

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Business

France's oldest luxury fashion label is facing one of its darkest hours. Sales are in a slump, losses are set to widen this year, and a cost cutting strategy is leaving employees in panic. Reports of Lanvin's dire situation first broke on Reuters.

Lanvin holds the distinction of being one of the last independent major fashion labels, while many of its competitors belong to luxury fashion conglomerates like LVMH and Kering.

In 2015, the brand fired famed creative director Alber Elbaz, who was credited with reviving the stagnant luxury label. Elbaz, a celebrity among fashion designers, created feminine silhouettes, and his public persona was a major force in driving the brand's success.

In contrast, his successor Bouchra Jarrar, who was tasked with boosting the brand's, has designed more tailored, conservative silhouettes, that customers clearly aren't responding too. She is also not as big in the public eye. Her first collection for the brand did poorly, and the second collection didn't do much better.

Lanvin's sales are still in a slump

A source with access to the company's results told Reuters that sales fell 23 percent last year to 162 million euros, compared to their peak of 235 million euros.

Sales took a further decline in 2017 of 32 percent. Although it is a difficult time for retailers, rival brands such as Gucci are still doing. The luxury consumer just isn't going for Lanvin.

The company has appointed advisory firm Long Term Partners to look at ways to reduce costs and shutter stores. They are already plans to layoff nine people, and reduce advertising spending and store investments.

In the face of declining business, some employees are already leaving and given the negative press, they are also having trouble attracting talent.

Their shareholders are also reluctant to invest more cash into the business. Controlling shareholder Shaw-Lan Wang has hesitated to invest in the brand for years, and won't let Swiss investor Ralph Bartel invest into the business either to prevent him from diluting her stake.

Given the era of designer musical chairs we live in, if Jarrar doesn't turn the brand around soon, it is possible that Lanvin will start seeking a new designer.

While the company has long remained independent, if their sales continue to struggle, there is also the possibility a luxury conglomerate like LVMH could try and scoop them up if the opportunity presented itself. However, that idea is still a far off hypothetical.

photo: via Lanvin Facebook page
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