I have always been curious with how fashion houses make money.
Boutiques are in places with the highest rents, designers, models, fashion shows, advertising, campaigns, functions and events all costs a lot of money.
How many expensive dresses or bags can the flagship Parisian boutique of Lanvin sell in a day?
What Wang needs to do to make it profitable again?
But at the rate this is going, assuming the situation is like what the above mentioned, she is going to suffer a slow death, expenditures will be there yet little income.
My guess is that she will be forced to make a decision soon..
The reality today is that a lot of fashion or luxury houses are making money with their clothes. But that doesn't mean that their business is driven by clothes.
For a longtime, there was this fantasy that people only bought the perfumes and handbags but never the clothes. It has never been totally the truth.
The big difference between small fashion houses and big luxury conglomerates is the "trend" factor.
Look at Marc Jacobs. His clothes were selling at Vuitton...Even if it was 20%, it was considered as good because Vuitton RTW is quite exclusive.
His own brand was a real fashion brand and most of sales were RTW. As soon as the hype around Marc Jacobs died, the business was in trouble even more than compared to a lot of other designers, he didn't have a signature and the expansion was too agressive.
This is what happened with Lanvin. Mrs Wang surely did invest a lot. Early on, they had campaigns with big photographers, big models and the house started to make money out of clothes very fast. They never had an it bag to secure their business and they reached their peak at a time when people were dressing up.
Suddenly, people wanted to dress down and Lanvin was about cocktail dresses.
To make money again, they needs to invest in a good creative direction and in the business side. Simple as that.
Look at Versace. Their business is totally driven by clothes & accessories. They don't have a signature blockbuster perfume a and they only recently had their first "It Bag".
From 1998 to 2004/2005...The house was slowly dying. Donatella changed her team, had a lot of good reviewed shows, they closed a lot of their stores around the world and only kept the most prestigious. Of course they always had the support of their loyal customers and Hollywood. And once they were ready for world domination, they did the H&M thing.
The thing about Lanvin is that they are still going to lose money because Bouchra's collections don't standout enough. The stores are not interested in buying it and she hasn't manage to keep Alber's customers. The people who are buying Lanvin today are new customers or people who bought Bouchra's clothes.
Lanvin needs a total Revamp à la Loewe/Saint Laurent but i don't think that anyone would be interested in working with Mrs Wang.
Marni does this too for at least some collections.
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Radical, I know. I'm sure that's where quite a bit of Lanvin revenue has come from.
