What happened
Shares of Lanvin Group (LANV 1.42%) rocketed 86.7% higher this week compared to where they closed last Friday, according to data from S&P Global Market Intelligence, after Chinese conglomerate Fosun International disclosed it had acquired more than 2% of the French luxury brand in a private placement.
Fosun acquired a controlling stake in Lanvin in 2018 with the intention of taking the old fashion house public. Lanvin went public on Dec. 15 after completing a reverse merger with special purpose acquisition company (SPAC) Primavera Capital Acquisition.
Image source: Getty Images.
So what
The stock began trading at $10.20 a share, but quickly plummeted and lost more than half its value. It closed last Friday at $4.51 per share.
Fosun filed with the Securities and Exchange Commission that same day a statement saying that while it was eligible to file a Schedule 13G because it owned more than 5% of the stock prior to the merger with the SPAC, it instead filed a Schedule 13D because its subsidiary Fosun Fashion acquired more than 2% of Lanvin stock in a private placement over the past 12 months.
When Lanvin stock opened for trading for the holiday-shortened week on Tuesday, it nearly doubled in value to $8 per share, before settling for a 38% gain at $6.25 per share. It closed on Thursday at $8.42 per share.
NYSE: LANV
Key Data Points
Now what
Lanvin has been in existence since 1889, but has fallen far behind other leading French couture brands like Chanel and Hermes in name recognition in China. Fosun International, however, rebranded Fosun Fashion as Lanvin to help boost its appeal globally, and is hoping the SPAC merger helps it pay down its sizable $36 billion worth of debt. It maintains Lanvin will be profitable by 2024 and will triple its revenue by 2025.
China has long been seen as a key market for luxury brands and accounts for 17% of global spending on such goods. It is forecast China will become one of the largest markets for luxury goods spending, with it, China, and the Americas each accounting for around a quarter of the total.
