With a new team at the top and a worldwide slowdown in luxury retail, the Fosun-owned company's Sergio Rossi footwear brand may be next to go

image credit: Bamboo Works

Key Takeaways:

• Lanvin's sale of its Caruso menswear unit will shrink its revenue by more than 10% but should strengthen its gross profit margin
• The naming of Han Jiyang as the company's new CFO follows two earlier changes at the top and may signal a larger restructuring for Fosun's struggling luxury fashion unit

After years of losses, conglomerate Fosun Group seems determined to refashion its Lanvin Group (NYSE:LANV) luxury unit into a profitable business.

The sale of the company's Caruso Menswear unit, announced earlier this month, looks like just the beginning of a much-needed shakeup. It came not long after Lanvin's Sergio Rossi footwear brand announced it was parting ways with its latest creative director less than two years after Paul Andrew joined the company. The two moves almost certainly signal more changes to come at what was once seen as China's challenge to global fashion heavyweights like LVMH (OTC:LVMUY) (OTC:LVMHF) and Kering (OTC:PPRUY) (OTC:PPRUF)

While no price was given, Caruso may have sold for more than $20 million, based on its revenue contribution to Lanvin, which is valued at more than $200 million. The buyer was MondeVita Italy, the lifestyle and luxury division of Mondevo Group.

More change may already be happening, as Lanvin may be preparing to sell its Sergio Rossi factory to Milan-based footwear and handbag wholesaler Massimo Bonini, according to a Jan. 29 report by Women's Wear Daily.

Lanvin's stock initially tumbled 27% in the two trading days after the Feb. 6 Caruso sale announcement, as investors worried about turmoil at the company. But optimism that the company may finally be taking steps to shed underperforming assets later sparked a rally that has seen the shares rise more than 50% since Feb. 9.

Caruso provided around 13% of Lanvin's revenue in the first half of last year, and Sergio Rossi provided another 11.4%, meaning Lanvin could lose about a quarter of its income if it ultimately disposes of both brands. But such moves should also lift the company's overall profitability.

Caruso's gross profit margin was an unimpressive 28.8% in the first half of 2025, while Sergio Rossi's was better at 40.8%. Lanvin's other three brands have higher margins, including 54.4% for its namesake Lanvin brand, 56.1% for hosiery retailer Wolford and 68.7% for womenswear seller St. John, giving the company an overall gross margin of 53.9% in the first half of 2025. By comparison, LVMH's gross margin last year stood at 66.2%, while Kering's was 72.6%.

Lanvin's latest results from the first half of last year were far from pretty. Its revenue fell 22% year-on-year to 133 million euros ($156.9 million), similar to a 23% decline it reported in 2024. The company has never reported a profit, and its latest loss totaled 87 million euros in the first half of 2025, widening from a 69 million euro loss a year earlier.

The sale of Caruso and Sergio Rossi's manufacturing assets, and possibly a future sale of the Sergio Rossi brand, represent a dramatic turn for the company, and not a moment too soon.

The global market for personal luxury goods shrank by 2% last year to 358 billion euros, according to consultancy Bain. That weakness was evident in the fourth-quarter 2025 earnings reports from LVMH and Kering, which both showed revenue declines. Saks Fifth Avenue, the largest U.S. luxury retail chain, declared bankruptcy last month.

CFO departure

Lanvin hinted at its restructuring last October, when it announced the departure of longtime executive president and CFO David Chan, and quickly appointed Han Jiyang, a veteran financier from one of Fosun's other units, to take his place. The company also named St. John head Andy Lew as its new CEO in early 2025, replacing Eric Chan, who lasted just one year in the position. Lanvin also changed its general counsel last December.

Caruso is one of Lanvin's five brands that were purchased separately and then merged into a standalone company by Shanghai-based Fosun, one of China's leading private conglomerates. Founded in 1958, the brand was one of Fosun's first luxury purchases in 2013, while Sergio Rossi was one of the last in 2021.

With about 450 employees and a factory in Soragna, near Parma, Caruso's products are made entirely in Italy. Sergio Rossi produces footwear at a factory in San Mauro Pascoli, and also outsources some production. Sergio Rossi had 43 directly operated stores as of 2024 as well as an e-commerce website and points of sale in department stores.

With Caruso gone and Sergio Rossi possibly on the block, the big question is what Lanvin will look like when dust from the ongoing overhaul finally settles. A Sergio Rossi sale would leave it with St. John, based in North America; Wolford, based in Austria; and its flagship Lanvin brand, one of the oldest French maisons, founded in 1889.

St. John, with its main market in North America, has been the best performer of that trio. In the first six months last year, the brand reported revenue of 39.7 million euros, roughly the same as a year earlier. The Lanvin brand, whose major market is Europe, saw sales plunge 42.1% in first half of last year to 27.9 million euros, while Wolford's revenue declined by 22.6% to 33 million euros over that time.

When Fosun began cobbling together its fashion arm in 2013, it expected to bring the international brands it was acquiring to its home in China, which was one of the world's fastest growing personal luxury goods markets at that time. But China's economic slowdown has led to growing consumer caution, and luxury goods are one of the easiest things to forgo in such an environment.

In a recent report, however, Bain forecast a rebound in the China market for personal luxury goods. After shrinking by about 4% in 2025, following a roughly 18% drop in 2024, Bain predicted "modest expansion" for the market in 2026.

But it's debatable whether Lanvin can capitalize on the rebound. Bain found that in 2025, emerging domestic brands led the Chinese luxury market. What's more, demand for two of Lanvin's core product areas, fashion and leather goods, fell by about 6% and 10%, respectively, that year. "Brands that maintain strong desirability and deliver clear value through innovation and targeted pricing strategies are proving more resilient," Bain noted in its report.

Fosun has had its own problems these last few years, most notably a debt crisis that nearly crippled the company a few years ago. But it survived that crisis, partly by selling some of its non-core assets. Now, it appears to be turning its attention to some of the smaller pieces in its empire acquired during a buying spree in the first part of the 2010s. Lanvin is clearly one of those pieces, and is finally getting some much-needed attention from its parent as it searches for a path to profitability.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.