St. John Knits reported a 14% decline in first half sales to $43 million as the global luxury market softens.
The Irvine-based knit fashion house is the third largest of five brands in Lanvin Group’s portfolio that also includes Lanvin, Wolford, Sergio Rossi and Caruso. Lanvin overall reported a 21% decline in sales to $189 million for the six-month period ended June 30.
“Struggles in the wholesale channel compounded the issues of a softening global luxury market in the first half of 2024,” Lanvin Chief Executive Eric Chan said in a statement (NYSE: LANV).
“The revenue impact was consistent across the distribution channels,” the company said, with wholesale falling 13% and direct-to-consumer (DTC) declining 15%.
St. John’s largest market is North America, which saw sales decrease 10%. Lanvin said it still outperformed other regions and helped the fashion house “maintain relative stability.”
The Asia-Pacific (APAC) market, which represents less than 10% of the St. John’s revenue, was down 46%, reflecting the general softness Lanvin said existed in the global category.
For the second half of 2024, the brand aims to continue “pushing its ‘basics’ product lines” and will “further refine its retail network and overhead.”
Last year, Lanvin Group began prioritizing and investing in marketing efforts to “generate brand heat” within its retail portfolio.
With this focus, Chan pointed to a slate of “successful marketing events” that St. John has held so far highlighting the debut of its New York City flagship store and its campaign with handbag maker Edie Parker featuring actress Leighton Meister; the latter grew its followers on TikTok by 2,000%.
“The brand continues to grow its presence in new demographics and its performance has been elevated by new and younger clientele,” Chan said during an investors’ presentation in August.
St. John is getting ready to move into its newly leased headquarters in Anaheim, spanning 85,000 square feet, in October. The fashion house has over 200 employees in Orange County and the new headquarters will allow the entire team to operate under one roof.
The move also marks a boost in space for the luxury retailer, whose current base near John Wayne Airport runs about 32,000 square feet.
Luxury Going Soft
Lanvin cited a softness in luxury retail and a “struggling wholesale market” as the main drivers of the revenue decline across its operations.
Two of its other brands, Wolford and Sergio Rossi, also dealt with delayed shipments and planned reduced production, respectively, which directly affected their separate results.
The parent company is also close to completing an ongoing upgrade of its store network with “disciplined” new openings and closing underperforming locations, which included a reopened St. John location in Hong Kong.
Lanvin expects a challenging second half of 2024. However, the parent company is looking forward to new creative direction with its appointment of Peter Copping as the group’s new artistic director starting during the second half of 2024.
“Lanvin Group will continue to focus on revenue expansion opportunities through marketing campaigns to maintain brand momentum and with a tactical approach to expand its store network,” the company said of its full-year outlook.
Lanvin shares were trading around $1.75 apiece at press time with a market cap of $198.4 million. The stock is down around 40% year-to-date.
