Who is Mr Guo, Lanvin’s new owner?

Employees of the French designer label Lanvin can breathe easy now. The venerable fashion house is finally emerging from the black hole in which it has been stuck since the departure of Alber Elbaz. At least, this is the gist of the announcement of an agreement signed earlier this month between the fashion house Lanvin, previously owned by Shaw-Lan Wang, the Chinese businesswoman and media magnate based in Taiwan, and Fosun International Group, which is going to invest more than 100 million in the company. Madam Wang will cease to be the majority shareholder but will remain a company shareholder.

The agreement is timely. The oldest Parisian fashion house still in business was suffering from a terrible cash flow problem in addition to a spectacular fall in sales, turnover, and profit. References were previously made to a net loss of 18.3 million euros in 2016 and 27 million euros in 2017. The auditors of accounts alerted the Paris court of the label’s perilous situation last autumn. The fashion show in February had already been canceled and replaced by a simple presentation. The stress level was at such a high level that employees at Rue du Faubourg Saint Honoré were asking whether their salaries would be paid in March. There was an urgent need to recapitalize the brand.

The takeover was not a secret. Madam Wang was in discussions with several groups. LVMH and Kering withdrew from discussions early on. Two groups were left in the running: the Qatar company Mayhoola and the Chinese group Fosun International. Observers all inclined towards the Qatari solution. In fact, Mayhoola had been courting Lanvin for several years. The Qatari investment fund, specializing in investments in the luxury industry and fully controlled by the Royal Family of Qatar, had shown what it could do when it purchased Valentino in 2012 for 756 million euros, and more recently Balmain in 2016 for around 500 million euros. It was the ideal candidate.

Fosun international, Lanvin’s new owner

However, against all expectations, Fosun International has won. It is a group controlled by Chinese billionaire Guo Guangchang. Contrary to Mayhoola, the Asian group founded in 1992 is not a specialist in luxury. Nevertheless, the career of Guo Guangchang, whilst it contains numerous shadowy areas (he mysteriously disappeared in December 2015) is certainly the stuff of fiction and grabs the attention. He is the son of peasants from Zhejiang Province near Shanghai and studied economics at Fudan University. He created Fosun with two close relations – a graduate in genetics, and his first wife. He has been compared with Warren Buffet for his flair, his people skills and his nose for sniffing out a good business opportunity. Whilst he is not well known in the luxury world, he knows French companies well since he made a takeover bid for Club Med in 2013. After a battle which lasted a year and a half, Fosun obtained the majority of the shares of the leisure club.

Today, Fosun is described as the leading private conglomerate in China. Close to the former President Jiang Zemin, Guo Guangchang’s relations with the current President Xi Jinping are not quite as good, which would explain the businessman’s disappearance two years ago. Fosun has a minority holding in the travel agency Thomas Cook, and the group is also a shareholder of Cirque du Soleil, the One Chase tower, and the brand Folli Follie. According to Forbes magazine, Mr. Guo is the 34th richest person in China, with a net worth of 6.3 billion euros. There is nothing in this biography to indicate the methods and the visions that the businessman, more used to the tourist trade, may deploy at Lanvin. At present, all that is known is that Fosun is planning to dedicate a significant share of the amount contributed by the firm to development projects. Will these investments be enough?

This story was first published on FashionUnited.fr .

Photo : www.fosun.com