LANV

Thank you for joining us, and welcome to the Lanvin Group's fiscal year 2025 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please single a specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Now, please take a moment to review the disclaimers. During this presentation, the company will be making certain forward-looking statements, including but not limited to, future performance and industry outlook. Forward-looking statements are inherently subject to risks, uncertainties, and other factors, and they are not guarantees of performance. For today's presentation, I would like to introduce Andy Lew, Executive President of Lanvin Group, and Ray Han, CFO of Lanvin Group. I will now turn it over to Andy to start the presentation.

Good evening, good afternoon, and good morning to everyone joining us today. Thank you for taking the time to participate in Lanvin Group's full-year 2025 results presentation. We truly appreciate your continued interest and support. Today, we will walk you through our financial and operational performance for 2025, discuss the progress we have made on our transformation journey, and share our outlook as we move into 2026. It has been a year of disciplined execution and important structural changes for the group, and we are pleased to begin sharing the story with you. 2025 was a year defined by both external challenges and internal transformation. On the one hand, the global luxury market remained under pressure, particularly in Greater China, with softer consumer demand and macroeconomic uncertainty.

On the other hand, we continue to take deliberate actions to reshape our business, streamlining operations, optimizing our retail footprint, and reinforcing our focus on core brands. For fiscal year 2025, Lanvin Group reported revenue of EUR 240 million, down 18% year-over-year. While the top line reflects these headwinds and strategic adjustments, we are encouraged by the progress we made beneath the surface. We saw sequential improvement in performance during the second half of the year, particularly at Lanvin and Wolford, which indicates that our actions are starting to take effect. We continue to streamline our retail footprint, focusing on our core business units and key regions. This has enhanced operational efficiency and allowed us to improve EBITDA despite lower revenue. We also accelerated our portfolio optimization efforts in 2025.

As part of this, we completed the carve-out of Caruso in the beginning of 2026, enabling us to concentrate resources on our core brands, leverage external partnerships, and further advance our asset-light operating model. Finally, we strengthened brand leadership through continuous team upgrades, ensuring we have the right capabilities in place to support long-term strategic execution. Overall, while the environment remains challenging, we have made meaningful progress in reshaping businesses and building a stronger foundation for the future. Page six highlights several key metrics. We landed with a gross margin of 58% in 2025, demonstrating resilience in pricing and inventory mix management despite lower volumes. We've also made meaningful progress in optimizing our cost base, achieving approximately 12% savings in operating expenses compared to the prior year.

The number of directly operated stores was reduced to 174, reflecting a deliberate shift toward higher quality, more productive locations. At the same time, we're increasingly adopting an asset-light model, allowing us to improve flexibility and capital efficiency. Encouragingly, contribution margin improved significantly in the second half of the year, increasing by 40% compared to the first half, reflecting the early impact of these initiatives. Page seven provides a deeper look at our half year performance and improving trajectory we began to see during 2025. Gross profit showed improvement in the second half of 2025 since first half of 2024, reflecting better product availability, improving sell-through, and more disciplined inventory management. At the same time, we continued to reduce operating expenses through structural cost optimization and improve efficiency across the organization.

This combination, stabilizing gross profit and lower operating costs, has started to improve our operating leverage. While we are still in a transition phase, these trends reinforce our confidence that the actions we have taken are moving us in the right direction. Another critical pillar of our transformation has been strengthening our leadership team. We made several key appointments across the group. At St. John, Mandy West has taken on the role of CEO, bringing strong commercial expertise and deep understanding of the brand. At Wolford, Marco Pozzo joined as CEO, adding extensive experience in luxury and global brand management. These leadership upgrades are not just organizational changes, they are essential enablers of execution. With stronger leadership in place, we are better equipped to drive brand development, improve operational discipline, and accelerate decision-making across the group.

We'll now take a closer look at the key strategies and achievements across each of our brands in 2025. This is where much of the transformation work has taken place. Let's begin with Lanvin. For Lanvin, 2025 was a year of repositioning and rebuilding. We introduced a refreshed creative direction under Peter Copping, reinforcing the brand's couture heritage while modernizing its appeal. Importantly, Peter's 2025 collections were positively received by the fashion press, with reviewers highlighting his return to Lanvin's heritage codes, refined elegance, and renewed creative direction. We noted the strong reception to his debut, reflecting encouraging early momentum around the brand's creative reset. At the same time, we focused heavily on operational fundamentals, reducing inventory, improving margin discipline, and optimizing the retail network. We also streamlined the organization to improve agility and execution.

With these actions impacted short-term revenue, they are critical to restoring the brand's long-term strength and desirability. Next, let's turn to Wolford. Wolford made significant progress during the year, despite challenges in the first half. We implemented a balanced product strategy, strengthening the core collection while introducing new offerings to enhance relevance. The brand celebrated its 75th anniversary, which played an important role in increasing visibility and reconnecting with customers globally. At the same time, we improved the omni-channel experience, enhancing both the digital platform and in-store environment. These efforts contributed to a strong recovery in the second half of the year. Now let's move to Sergio Rossi. Sergio Rossi continued its transformation journey toward a more efficient and flexible operating model. We focused on strengthening operational fundamentals, including supply chain improvements, closer alignment with key suppliers, and the resolution of legacy issues.

In parallel, we streamlined the retail network, concentrating on higher potential locations. Building on these efforts, we advanced the transition to an asset-light model and took a further step in direction through a strategic partnership, enabling greater focus on product development and merchandising while reducing operational complexity and mitigating production-related risk. This also improves cost flexibility, shifting part of the operating structure toward a more variable base while maintaining alignment and the brand's long-term development. Taken together, these actions are essential to stabilizing the business and positioning it for recovery. Let's review St. John. St. John continued to demonstrate strong resilience in 2025. The brand benefited from its strong position in North America, supported by solid wholesale performance and continued momentum in e-commerce.

We further strengthened our partnership with Nordstrom, including the expansion of our presence across additional locations, which contributed to over 40% growth and enhanced brand visibility. At the same time, we upgraded our digital capabilities by strengthening the e-commerce team and onboarding a new marketing agency, driving a double-digit increase in online sales versus the prior year. We also continue to refine our product offerings with a particular focus on knitwear, which remains a core strength of the brand and supported improved full price sell-through. In addition, our collaboration with Malbon in 2025 helped broaden the brand's audience, attract new customers, and further enhance brand awareness. Overall, St. John remains a stable and important contributor to the group with a clear focus on North America, disciplined execution, and continued brand development.

Looking ahead to 2026, our focus remains on completing the transformation and moving towards sustainable profitability. We will continue to advance the initiatives launched in 2025, including portfolio and channel optimization, cost discipline, and the transition to an asset-light model. At the brand level, we expect continued recovery at Lanvin and at Wolford, further progress at Sergio Rossi, and stable performance at St. John. While the macro environment remains uncertain, we believe these actions we have taken have created a stronger foundation for the future growth. With that, I will now hand over to Ray Han, our Chief Financial Officer, who will walk you through the financial results in more detail.

Thank you, Andy. I'll now walk you through our financial performance for 2025. Before going into the detailed financials, I'd like to briefly address the treatment of Caruso in our 2025 results. At the end of 2025, management team approved the strategic carve-out of Caruso as part of our portfolio optimization efforts. In line with IFRS requirements, Caruso has been classified as discontinued operation, with all comparative periods restated to exclude the business for consistency of presentation. The transaction was subsequently completed on February 6th this year, further reinforcing our commitment to streamline the portfolio and focus on long-term value creation. With that context in mind, let me walk you through the group's financial performance.

As Andy mentioned, 2025 was a year of transformation, and while it impacted our top-line performance, we did make meaningful progress to improve operational efficiency and financial discipline. Group revenue declined from EUR 292 million in 2024 to EUR 214 million in 2025. The decline was primarily driven by Lanvin and partly by Wolford and Sergio Rossi, reflecting both macroeconomic pressures and deliberate restructuring actions, including retail footprint optimization for all four brands, and brand repositioning globally. Overall, while revenue declined, it's very important to emphasize that it reflects strategic positions rather than purely demand-driven weakness. Let's now take a look at performance by region. From a regional perspective, North America continued to outperform other markets. It was largely supported by St. John's very strong presence and resilient performance in the region.

In contrast, the EMEA and Greater China experienced more significant declines, reflecting weaker consumer sentiment. Greater China in particular, saw a more pronounced decline consistent with broader market trends as we continued our store network review. These regional dynamics reinforced our strategic focus on strengthening our position in home market while selectively optimizing our presence in other regions. Looking at revenue by channel, DTC remained the largest contributor, accounting for approximately 68% of total revenue. Both DTC and wholesale declined year-over-year, reflecting both market conditions and our deliberate actions to streamline the retail network. At the same time, we saw encouraging signs of stabilization, particularly in wholesale at Wolford and St. John. Going forward, we will continue to balance DTC and wholesale channels with a focus on profitability and efficiency rather than purely the scale. Let's now move to our retail network.

As previously mentioned by Andy, store network optimization has been a very key component of our transformation since 2024, in line with broader trends across the luxury sector. The number of directly operated stores decreased from 225 in 2024 to 174 in 2025, reflecting our strategy to exit underperforming locations and concentrate resources on higher productivity stores in key markets. Despite the short-term impact on revenue, it will substantially improve the quality of our retail footprint, which is helpful for the long-term profitability of the group. Next, let's turn to profitability metrics. On this slide, we summarize the evolution of gross profit, contribution profit, and adjusted EBITDA. I'd like to highlight that while gross profit decreased in 2025, we managed to maintain the gross margin at 58%, reflecting lower sales volumes but relatively stable pricing and inventory management.

Contribution profit improved slightly year-over-year, supported by reductions in expenses. Adjusted EBITDA improved to a loss of EUR 90 million, demonstrating the early impact of our cost reduction initiatives. Overall, while our productivity remains negative, the trajectory is improving, particularly as we move into the second half of the year. Let's now break it down by brand. Wolford and St. John contributed positively to the improvement in Contribution profit, reflecting improved cost discipline and operational efficiency. Sergio Rossi saw a slight decrease, although it was partially offset by strict cost control measures. Lanvin remained broadly stable despite revenue decline, highlighting the effectiveness of cost management initiatives. At a group level, we saw a more balanced and improved cost structure. Let's now move to working capital. During the year, we continued to make progress in working capital management.

Inventory decreased from EUR 79 million in 2024 to EUR 57 million in 2025, and trade receivables decreased from EUR 21 million-EUR 15 million, reflecting tighter operational discipline and better alignment between supply and demand. At the same time, trade payables normalized from EUR 76 million-EUR 46 million. As a result, the cash conversion cycle increased to 65 days in 2025 from 34 days in 2024, and trade working capital increased to 11% of revenue from 8%. While inventory and receivables showed clear improvement, overall working capital efficiency was temporarily affected by payables normalization. Improving cash conversion and maintaining disciplined working capital management remain key priorities as declined by 30% to EUR 58 million in 2025. It reflects the ongoing repositioning of the brand as well as retail network optimization and reduced reliance on previous product categories.

Despite this, gross margin remained stable at around EUR 58 million, and contribution losses were broadly contained. Encouragingly, we saw signs of improvement in second half, particularly following the introduction of new creative directions from Peter Copping. Looking ahead, we expect continued progress as the brand reviews its product offering and strengthens its wholesale channel. Let's move to Wolford. Wolford revenue declined by 14% to EUR 76 million. The first half was impacted by prior logistics disruptions, but performance improved very significantly in the second half. Wholesale grew 19% year-over-year, supported by improved product availability and stronger execution. At the same time, contribution losses improved by EUR 5 million, reflecting better cost discipline. Looking ahead, we expect continued recovery driven by improved supply chain stability, stronger marketing and enhanced customer acquisition. Next, on Sergio Rossi.

Sergio Rossi revenue declined by 30% to EUR 13 million. Both DTC and wholesale channels were impacted, reflecting cautious market sentiment and ongoing brand transformation. Gross margin declined due to channel mix and lower production scale. However, cost control remained strict during the year, limiting the increase in contribution losses. Looking ahead, the focus is to improve production stability, strengthen wholesale partnerships, and continue the asset-light transition.

Next, let's review St. John. St. John delivered quite resilient performance during the year, with revenue declining only 1% to EUR 78 million. In its reporting currency, the brand grew by 3%, supported by strong performance in North America. Wholesale and e-commerce were key growth drivers, increasing by 14% and 25% in its reporting currency, respectively. Gross margin remains very strong at 69%, and contribution profit improved as well. St. John continues to be a stable component of the group. Okay, I will turn it back to Andy for closing remarks.

Thank you, Ray. In summary, 2025 was a year of disciplined execution and structural transformation. While the top-line performance reflects a challenging environment, the underlying improvements in cost structure, operational efficiency and brand positioning provide a stronger foundation for the future. We are encouraged by the momentum seen in the second half and remain focused on driving continued improvement in 2026. This concludes our prepared remarks. We will now open the call for any questions. Thank you.

Thank you, Ray and Andy. We will now open the floor for questions.

Thank you for joining us, and welcome to the Lanvin Group's 2025 First Half Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. Now please take a moment to review the disclaimers. During this presentation, the company will be making certain forward-looking statements, including, but not limited to, future performance and industry outlook. Forward-looking statements are inherently subject to risks, uncertainties and other factors and they are not guarantees of performance. For today's presentation, I would like to introduce Andy Lew, the Executive President of Lanvin Group; and David Chan, Executive President and CFO of Lanvin Group. With that, I'd like to turn it over to Andy Lew to start the presentation.

Thank you, and welcome, everyone. I'm Andy Lew, the Executive President of Lanvin Group. The story of our first half is navigating a tough climate while preparing for a stronger future. We operated against the backdrop of persistent global macroeconomic and geopolitical uncertainty. Performance at some of our brands was tempered by creative transitions as the market awaited new collections and by overall sector softness. Despite these challenges, I'm proud to highlight that St. John demonstrated remarkable resilience growing its core North American market despite the volatility. Most importantly, our strong cost discipline and accelerated retail footprint optimization began to deliver visible improvements in the second quarter. A positive trend we are focused on continuing. Our strategy is built for the long term, and we are confident that the foundational work we completed in the H1, particularly with our new creative leadership positions us to capture demand as conditions improve. Turning to Page 5. Let's review the brand level achievements in the first half that are shaping our future. At Lanvin, Peter Copping made his much anticipated return to Paris Fashion Week this January, earning strong global acclaim for his debut collection, which celebrated the House's timeless French elegance. At Wolford, the brand reinforced its essentials positioning with the In Your Own Skin campaign, further defining its identity around modern essentials that balance refined design with enduring relevance. Separately, Wolford also completed a capital increase in H1 to provide additional support for its strategic transformation. For Sergio Rossi, the first half was above anticipation. The brand unveiled Paul Andrew's first collection, massively emerging tradition with modern innovation, a collection we expect to drive fresh commercial traction in the second half. St. John successfully revived its most iconic archival designs and collaborated with golf brand Malbon on a sport-lux capsule, blending classic knitwear with modern aesthetics. And finally, Caruso, added new first-tier Maison accounts while maintaining strong relationships with existing clients, and generated excellent press coverage at Pitti Uomo. Our priorities for the remainder of the year are clear and action-oriented as outlined on Page 6. First, we have strengthened brand leadership to ensure disciplined execution. At the brand level, teams have been reinforced with several key appointments, including a new Deputy CEO at Wolford. At St. John, we promoted internal talent to the roles of Chief Commercial Officer and Chief Operating Officer alongside the appointment of a new Chief Merchandising Officer. These promotions not only recognize the strong capabilities within the organization but also underscore our ability to expand responsibilities from within, while positioning the brand for its next phase of growth. Second, we continue to drive efficiency by streamlining operations and optimizing our retail footprint. In the first half, we rightsized 29 underperforming stores and will continue a comprehensive review of our network while further evaluating brand image and retail productivity. Third, we remain focused on protecting free cash flow through disciplined working capital management and rigorous cost control. And finally, we are deploying targeted marketing initiatives to boost traffic in conversion with the launch of the highly anticipated collections from both Lanvin and Sergio Rossi in the second half of 2025. Expected to inject renewed growth momentum across the group. With that, I'll hand it over to David to take you through our financial and brand level performance.

Thank you, Andy. I'm David Chan, Executive President and CFO of Lanvin Group. I'll be walking you through our first half financial at group and brand level. Page 7 provides a snapshot of group's financial performance. Our revenue in the first half was EUR 133 million, down 22% year-on-year, reflecting softer market conditions and the planned creative transitions. Gross profit margin declined by 400 basis points to 54%, primarily due to the sell-through of prior season inventory. Contribution profit margin and adjusted EBITDA margin decreased by 7% and 14%, respectively as lower revenue impacted operation leverage. However, these effects were partially mitigated by cost actions. Importantly, these measures preserve flexibility and position us to capture momentum in the second half of this year. Page 8 highlights the sequential improvement we saw in the second quarter, which supports our confidence for the back half of the year. Most brands show encouraging signs of recovery in the second quarter. Lanvin and Sergio Rossi's D2C revenue grew by 46% and 16% quarter-over-quarter, respectively. Wolford's gross profit margin expanded by 1,673 basis points and Caruso saw revenue growth of 11%. These results demonstrate that our operational initiatives are gaining traction, while St. John maintained steady performance throughout the entire first half. The revenue bridge on Page 9 shows the evolution of our top line from 2021. The ongoing macro industry-wide challenges were the leading driver of the revenue decline in first half 2025. In the context of a broader luxury market slowdown and creative transition, the group has made a proactive decision to advance its strategic repositioning across geography and product assortment. Last year's logistic issues also had a residual effect on Wolford's performance, but the business is now in recovery. Looking ahead, the additions of new creative talent at Lanvin and Sergio Rossi will be the key driver for growth in the second half. Page 10 breaks down our revenue by geography and channel. From a regional perspective, all key regions saw declines with EMEA and Greater China facing the most significant headwinds, while APAC resulted -- also reflected our planned strategic repositioning. By channel, both D2C and wholesale were down. Specifically, we saw major softness in wholesale for EMEA and cautious consumer sentiment in Greater China. On Page 11, we delve into our margin performance. The 400 basis point reduction in gross profit margin was driven by several factors. Sell-through of prior season inventory with creative transition, underutilization of production capacity and product mix changes. Contribution profit was pressured by lower revenues. Though we took measures to reallocate marketing investment towards higher return initiatives, critically, all brands aggressively pushed G&A cost reduction measures to offset marketing weakness. The decline in adjusted EBITDA to negative EUR 52 million was a result of this negative operational leverage, though our cost discipline helped prevent a larger drop. Page 12 and 13 detail our successful efforts in rightsizing our operational expenses. Since first half 2023, we have made significant strides in reducing G&A expenses across the board. As you can see on Page 13, Wolford reduced brand level G&A by 27%, Sergio Rossi by 25% and St. John by 35%. This disciplined approach to managing our cost base is fundamental to navigating the current environment, improving our path to profitability. At Lanvin, G&A expenses were EUR 17 million in first half 2025, up from EUR 14 million in first half 2024, but still 15% lower than first half 2023. The year-on-year increase primarily reflects investment in creative development, specifically research and sample costs related to Peter Copping's debut collection. These are strategic investment aimed at positioning Lanvin for long-term growth. Excluding these planned spend, Lanvin's underlying cost base are -- also reflects improved efficiency. Our retail optimization strategy is nearing completion. As shown on Page 14, we are ongoingly upgrading our store network through disciplined new openings in flagship locations and rationalization of underperforming stores. In the first half, we streamlined 29 stores, creating a more focused and productive footprint. This sharper portfolio not only significantly improves the efficiency of our operations, but also positions us for stronger brand equity and sustainable value creation. Looking ahead, as I outlined -- as we outline on Page 15, our focus remains on driving cost efficiencies, marketing optimization and brand enhancement. We will continue to implement our action plan to further reduce cost and improve margins. Our approach to marketing and footprint review will be highly tactical, focusing squarely on ROI. And finally, we will build the brand story and desirability at Lanvin and Sergio Rossi with their new creative leaders which we believe will be a powerful catalyst for growth. I will now move on to the brand results for the first half of 2025. Lanvin's revenue in the first half declined by 42%, primarily due to weak wholesale demand in EMEA where clients adopted a wait-and-see approach ahead of Peter Copping's debut collection. Despite this, EMEA retail remained highly resilient. And in the second quarter, the successful launch of our marketplace model drove a 46% increase in D2C revenue and supported a notable rebound in North America e-commerce. Gross margin also improved sequentially from 52% in the first quarter to 57% in the second quarter, reflecting stronger retail dynamics and early benefits of our optimization efforts. For the half year as a whole, gross margin decreased by 366 basis points year-on-year, primarily due to product mix changes and our ongoing retail network optimization. While the revenue decline pressured contribution profit, diligent cost saving initiatives cushioned the impact and we continue to invest in Peter's vision, which is integral for -- to our long-term strategy. Looking to the second half, our initiatives are focused on a powerful launch of Peter Copping. We will execute a global integrated marketing campaign for the debut collection, amplify reach through targeted social media and e-commerce activations and drive in-store traffic with refreshed visual merchandising and clienteling events. We'll maintain cost discipline. We're reinvesting in -- savings into product innovation, flagship location and strategic digital partnerships. Moving to Wolford on Page 18. Revenue was down 23%, reflecting the residual impact from last year's third-party logistics transition. However, within this figure, is a very positive story. The wholesale channel demonstrated strong growth of 14% in the period, driven by our strategic emphasis on partnership. The D2C decrease of 35% is a result of our active rightsizing of our retail network. Gross margin for the half year decreased due to the under-absorption of fixed cost -- production cost during the recovery phase and the planned liquidation of excess stock to improve inventory health. Encouragingly, the second quarter showed strong progress, with gross margin improving from 49% in the first quarter to 65% as inventory clearance was completed and production efficiency strengthened through higher capacity utilization. Another key achievement was an 18% reduction in G&A expenses, underscoring Wolford's commitment to operational discipline. Looking ahead to second half, Wolford will celebrate its 75th anniversary with a dedicated brand push that builds on essential focus. The campaign will spotlight iconic products at the core of its branded DNA while further optimizing the assortment. We will also continue to explore expansion opportunities in emerging markets, particularly in Middle East and APAC building on momentum from the recovery. On Page 19, we look at Sergio Rossi. Revenue fell 25% as customers held off on purchases in anticipation of Paul Andrew's first collection which is set to hit the market in the second half. We were encouraged, however, by a strong quarter-over- quarter rebound in Q2. The retail sale was up 17% and e-commerce was up 10%. Gross margin decreased by 9 percentage points due to markdowns related to product mix changes and underutilization of production capacity. The second half will be the transformative period for Sergio Rossi. The focus will be on leveraging Paul Andrew's new collection to reinvigorate the brand. We plan to expand the wholesale channel by proactively seeking new partners, continue driving cost control to improve operational efficiencies and reinforce our presence in core regions while making a targeted push into the U.S. market. Turning to Page 20 for St. John. The brand demonstrated exceptional resilience with revenue remaining nearly flat in a volatile environment. Its core North American market, which accounts for 98% of revenue, grew by 4%. The wholesale channel rose 11%, reflecting successful strategic key account partnerships, notably with Nordstrom. The brand maintained a stellar gross margin of 69%. Supported by consistent full price sell-through, contribution profit margin was also steady, decreasing by only 38 basis points. For the remainder of the year, St. John will continue to refine its key channels to improve conversions and boost sales. We will stimulate the e-commerce channel with newly onboarded talent, creating more seamless product mix to enhance design and merchandising processes and optimize the supplier mix to mitigate geopolitical risk and improve cost efficiency. Finally, let's review Caruso on Page 21. Revenue declined by 11%, primarily due to a slowdown into Maison business which is undergoing a broader reset phase in the luxury market. Importantly, the proprietary Caruso brand showed continued growth in order intake. Gross profit margin remained resilient at 29%, and contribution profit saw only a slight decrease amid the market headwinds. In the second half, Caruso will support the relaunch of selection the AAA Maison lines through collaboration with their new creative directors. The brand will also focus on acquiring new wholesale accounts in expanding markets like U.S.A., Benelux and DACH, and will continue to optimize its cost structure to improve operational efficiency. At this point, I'd like to have Andy provide some final remarks.

Great. Thank you, David. The first half of 2025 continued to present significant headwinds for the global luxury sector. Despite these persistent challenges, our focus remains unwavering. We maintained strict cost discipline, advanced our strategic creative transitions and laid the groundwork for future growth. While top line results reflect the difficult market environment, we are encouraged by the clear signs of recovery we saw in the second quarter across several of our brands. Our brands are taking decisive actions tailored to their unique market positions, and we're confident in their plans for the second half and going forward. Thank you again for your time and support, we will now open the line for questions. We will now begin the question-and-answer session.

[Operator Instructions] There appear to be no questions at this time, and this concludes our question-and-answer session, which also concludes the conference call. Thank you for attending today's presentation. You may now disconnect.

Thank you for joining us and welcome to the Lanvin Group's Fiscal Year 2024 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be opportunity to ask questions. Please note this event is being recorded. Now, please take a moment to review the disclaimers. During this presentation the company will be making certain forward statements including but not limited to future performance and industry outlook. Forward-looking statements are inherently subject to risks uncertainties and other factors and they are not guarantees of performance. For today's presentation I would like to introduce David Chan, Executive President and CFO of Lanvin Group; and Andy Lew, Executive President of Lanvin Group. I will now turn it over to David to start the presentation.

Thank you, and welcome to all -- welcome to all the participants. I'm David Chan, Executive President and CFO of Lanvin Group. Today, we'll take you through a comprehensive view of Lanvin Group's performance in 2024. The strategic actions we have taken to navigate a challenging environment and our road map for 2025 and beyond. The key topic today is to share how we overcame these hurdles and lay the groundwork for sustainable growth. 2024 was a year defined by macroeconomic turbulence, shifting consumer behaviors and industry-wide softness. Yet within these challenges, we achieved critical milestones that position us for recovery. For fiscal year 2024, our global revenue was €329 million, a 23% decrease from fiscal year 2023. This decline reflects broader industry trends, particularly in EMEA and Greater China, where macroeconomic pressures weighted heavily. Nevertheless, we took proactive measures to reduce G&A expenses and improved working capital management. We also consolidated our store network to optimize our retail footprint and concentrate on our core business units. These efforts, along with the appointment of Andy Lew as Executive President, whose expertise and brand transformation are expected to drive strategy implementation and bring transformative initiatives to our group. Andy's leadership, combined with new creative appointments Lanvin, Sergio Rossi signals a new era of innovation and growth. Let's take a deeper look at our 2024 results. Despite a 23% decline in revenue with effective cost control inventory management, we managed to maintain a stable gross margin of 56% compared with a gross margin of 59% last year. While contribution profit and adjusted EBITDA faced challenges, we are encouraged by progress in operation efficiency. G&A expenses were reduced by 15% year-over-year, a testament to our streamlined cost structure. We have also reduced directly operated stores, focusing on core and high potential markets such as EMEA for Lanvin and Sergio Rossi and North America forcing St. John. We've made significant strides in cash management with a 32% improvement in operating cash flow from 2020 to 2024, driven by reduced inventory days and tighter receivable management. These results demonstrate our dedication to operational excellence and financial discipline. Since 2020, Lanvin Group had delivered 10% CAGR underscoring the resilience of our diversified portfolio, our brands: Lanvin, Wolford, Sergio Rossi, St. John Knits and Caruso, each contributed to the Group's performance, leveraging their distinctive strength and strategies to grow our global footprint. Let's turn our attention to Slide 7, which highlights the revitalization efforts across our brand portfolio. During the past years, we have made significant strides in aligning them for sustainable growth, starting with Caruso. Our luxury tailoring powerhouse in St. John, the iconic American luxury brand both shows strong improvements. Caruso's contribution profit increased to €8.8 million in 2024, up from €3.2 million in 2022, a reflection of our success in refined distribution strategy and growing demand for Caruso’s playful elegance in bespoke tailoring. Similarly, St. John's contribution profit grew from a loss in 2020 to €8 million in 2024. Thanks to strategic investments in brand repositioning and digital infrastructure. We're confident that these steps will further amplify margins in the coming years. Lanvin, our crown jewel, saw revenue increase to €82.7 million in 2024 more than doubling from €35 million in 2020. This growth was driven by continued investment in increasing the brands like desirability and reinvigorating is puritan heritage, while appealing to a new generation of luxury consumers. Wolford, Austrian legware and ready-to-wear innovator also may strides. We adjusted the product mix to position Wolford as a full lifestyle brand expanding beyond legwear to cater to the growing demand for versatile high-end essentials. Finally, Sergio Rossi launched a global retail expansion since 2022, shifting from heavy reliance on wholesale and to enhance margin control and brand equity. While the top line is facing challenges, our foundational improvements set the stage for development. These achievements underscore our ability to focus on long-term strategic priorities, while undergoing short-term challenges. Let's now turn to Slide 8, which outlines our journey towards profitability. Over the past year, global headwinds including inflationary pressures and shifting consumer behaviors impacted our top line performance. However, we have repositioned – responded decisively by sharpening our focus on operational efficiency and cost discipline. There are three key pillars of our turnaround plans, which includes: first, gross profit resilience. Despite revenue declines, we maintained strong gross margin reflecting disciplined pricing and reduced promotional activity. Second, OpEx streamlining. We continued to reduce operating expenses since 2022, a testament to our commitment to lean operations. Last but not least is breakeven optimization. With narrow our break point through rigorous cost management ensuring our position to capitalize on revenue recovery. In 2022, our OpEx, which includes marketing, selling and G&A expenses stood at €378 million. By 2024, we reduced this to €326 million, a 14% cumulative savings over two years. Equally important is our improved cash management. Net cash used in operating activities improved by 27% since 2022, decreasing from negative €81 million to negative €59 million. This was achieved through tighter working capital controls including reduced reducing inventory days through minimizing excess stock and accelerating receivable collection. In 2024, we welcome new creative leadership with appointment of Peter Copping, as artistic Director of Lanvin; and Paul Andrew as Creative Director of Sergio Rossi. The vision and creativity are already making significant impact on our brands as seen in the positive reception of Lanvin's debut show under Peter Copping in January. I will now hand over to Andy who will provide insight into our chief in Jan [ph] 2024 and strategic priorities in Jan [ph] 2025.

Thank you, David. I'm Andy Lew and I'm honored to swerve as Executive President of Lanvin Group and I'm thrilled to share our brand level achievements in 2024. Starting with our iconic flagship brand in Lanvin. As mentioned by David in June 2024, we announced Peter Copping as Artistic Director, marking a pivotal moment for the brand. Peter's fresh creative vision has already reinvigorated Lanvin's DNA, timeless elegance with contemporary artistry. Lanvin has also launched the Character Study series a bold initiative that bridges [indiscernible] and modern culture. This was further amplified by our collaboration with choreographer Benjamin Millepied who's worked on a dynamic performative edge to our campaigns. Financially, Lanvin demonstrated remarkable resilience. Despite market pressures, we maintained a stable gross profit margin through disciplined cost control and inventory optimization. The highlight was Peter Copping debut fashion show in Paris, a triumph return to elegant garnered global claim and set the stage for our fall 2025 collection. Now, let's shift our focus to Wolford. Wolford is crafting compelling brand campaigns and product names that not only highlight its unique value proposition, but also elevate its positioning within the luxury market. Those marketing campaigns highlighted Wolford's unique value proposition collaborating like the Etro X Wolford capsule collection, emerging Italian flare with Austrian precision, not only expanded our audience but also move cultural relevance. Lastly, Wolford is enhancing the brand experience through a refreshed web shop identity and optimize retail and wholesale distribution, ensuring a cohesive and premium brand presence across all touch points. Turning to Sergio Rossi. In July, Sergio Rossi appointed Paul Andrew as Creative Director, a visionary move to redefine Italian footwear. Paul's fall 2025 collection set the view in Milan planned architecture bonus and timeless craftsmanship. Sergio Rossi its retail network focusing on key markets like EMEA and Japan. Efficiency continued to be a priority for Sergio Rossi with factor restructuring measure aimed at improving production lead-time and productivity, all while reducing costs. Additionally, Sergio Rossi has expanded its wholesale development by opening franchise stores in the Middle East and Taiwan through local partnerships, expanding its global footprint. St. John's 2024 strategy is centered on focus on jointly. We streamlined operations to prior North America, upgrading flagship stores in Beverly Hills and New York. These spaces now showcase our unique collection which marries classic knits with tech fabrics and a modern edge. Our new whole session model developed with our partnership with Nordstrom, improved margin control and brand consistency. Digitally, the revamped e-commerce performance already showing improvements in conversions. Lastly, the shift to an asset-light model including the sale of noncore products enhance our operational flexibility. Finally, Caruso amplifies resilience despite challenging luxury landscape. Not only did Caruso achieved its revenue growth in its proprietary brand business, market improvement was a standout. Positive net profit and robust cash flow underscore success of Caruso's strategy. Branded deal is growing for Caruso, thanks to high standard yet efficient content creation. Credible collaborations and trade events that resonate with your customers. Effective prototype and fashion show pieces management have also played a crucial role in this success. Proceeding to page 22, I am pleased to present our strategic priorities for 2025;initiatives to drive growth, agility and profitability across the portfolio. First and foremost, leadership and organizational excellence. We're building a dynamic leadership team, combining industry veterans with fresh perspectives to foster innovation and rapid decision making. Our new European headquarters based in Milan will enhance regional oversight, streamline operation and attraction relationships with key stakeholders. Second, creative momentum. Appointment of Peter Copping and Paul Andrew mark a new era of artistic vision. Their collections will reinvigorate brand relevance, supported by 360-degree marketing campaigns from runway shows to social media activations. Third, operational efficiency remains the cornerstone. We’ll continue optimizing store networks, prioritizing high-traffic locations and defining inventory management and pricing strategies to improve cash conversion cycles and reduce working capital. Fourth, market expansion. We're committed to key cities, while tapping into high-growth luxury markets. In the Middle East, new franchise stores as an example Sergio Rossi and Dubai Mall and partnerships are key initiatives for us. Additionally we'll also continue to explore emerging categories to diversified revenue streams. At Lanvin Group, we view challenges of catalysts for transformation, put the refreshed leadership team strategic market focus and unwavering commitment to craftsmanship, we're confident in our ability to deliver sustainable growth and restore profitability in 2025 and beyond. With that, I'd like to turn it back to David to go through some of the consolidated and brand level results in 2024.

Thank you, Andy. The year 2024 was marked by significant macroeconomic challenges yet two brands within Lanvin Group portfolio demonstrated notable resilience. St. John Caruso stood out in the midst, broader declines, leveraging strategic regional focus and operational agility. St. John's emphasis on North America coupled with its premium positioning and successful partnership with Nordstrom help stabilize performance. Similarly Caruso though facing a mild revenue drop achieved double-digit growth in its own brand business, driven by strong demand for its playful yet elegant collections and made a measure offerings. These assess partially offset pressure seen in other brands. Lanvin grabbling with creative transitions and softer luxury demand saw a revenue decline, while Sergio Rossi impacted by EMEA wholesale softness and reduced third-party production. Wolford is also negatively influenced by logistics integration, starting from Q2 2024. To put this into perspective. In terms of group level adjusted EBITDA in 2024, we estimate that the integration of Wolford Logistics had an impact ranging from €14 million to €18 million. And the creative transition impact of between €5 million to €10 million. Shipping out these transitional costs, our 2024 adjusted EBITDA is estimated at negative $64 million to negative €73 million, a range consists with our 2023 results. This stability is notable given the significant slower demand environment in 2024, underscoring our ability to maintain operational discipline amid external pressures. I will now provide with more details on 2024 financial results for each brand. 2024, as we mentioned, was a transitional year for Lanvin. Revenue declined 26% to €83 million, reflecting softer luxury demand and creative leadership gaps. While wholesale faced pressure, retail network optimizations and D2C resilience mitigated the decline. In the same time, Lanvin stabilized margins through disciplined actions. Gross margin improved to 59%, supported by pricing discipline in inventory management. G&A expenses were reduced by 14%, underscoring operational efficiencies. The appointment of Peter Copping as Artistic Director marked a turning point. His acclaimed January 2025 Fashion Show has already reignited industry interests with new collections set to launch in second half of 2025. We are confident that Peter's creative vision and targeted investment will drive momentum in 2025. Moving on to Wolford. Wolford navigated significant challenges in 2024 with revenue declining 30% to €88 million, macroeconomic volatilities, logistic disruption and wholesale softness in EMEA weighted on results. Looking ahead, Wolford's 75th anniversary in 2025 will be a catalyst. We are streamlining product launches, stabilizing operation and leveraging digital channels to reconnect with loyal customers. Wolford also has established a new management board to aim at sustainable future growth for the company. Now I'd like to discuss Sergio Rossi. Sergio Rossi faced headwinds in 2024 with revenue down 30% to €42 million. EMEA market declined 35%, mainly due to wholesale conditions and planned reduction of lower-margin third-party production. Greater China market declined 35% due to the challenging retail market. Japan market showed a slight decrease of 8%. Key actions included administrative expenses reduced by 18% through cost control and appointment of Paul Andrew as Creative Director whose first collection aims to be vitalized wholesale ownership in 2025. While gross margin fell to 43%, wholesale channel enhancement and targeted regional partnership will stabilized margins. Sergio Rossi's focus on operational efficiencies and fresh designs in 2025 will be critical to recover. Moving to St. John. St. John's demonstrated resilience in 2024, while revenue declined 12% to €79 million strategic focus yielded quicker wins. Gross margin surged 6 percentage points to 69% from 63% driven by full price sell-through and a successful partnership with Nordstrom. North America outperformed, contributing 94% of revenue, while international markets were streamlined to reduce complexity. In 2025, St. John will deepen its North American focus, emphasizing its Southern California heritage through storytelling and knitwear leadership. Enhanced digital capability is targeted to further amplify customer engagement. Finally, I'd like to discuss Caruso's results. Caruso navigated a tough luxury landscape with agility. Revenue decreased 7% to €37 million. The Caruso brand business grew double digits, fueled by the strong demand for its playful elegant collection and made-to-measure offerings. Gross margin held steady at 29% with contribution profit margin stabilized at 24%. In 2025, Caruso will expand distribution and amplify marketing efforts. Caruso's craftsmanship and service excellence position it to outperform even in a challenging market. At this point, I'd like to have Andy provide some final remarks.

Thank you, David, for the review. In closing, I want to emphasize that Lanvin Group's strength lies in our diverse brand portfolio and deep connections with loyal customers. Each brand, Lanvin, Wolford, Sergio Rossi, St. John and Caruso, brings unique heritage and craftsmanship, the foundation of an enduring luxury appeal. 2024 tested our resilience but has also sharpened our strategy. While challenges persist, Lanvin Group is emerging leaner, more focused and better positioned to capitalize on luxury's long-term fundamentals. As we enter 2025, we do so with optimism. Peter Copping's new collection, Wolford's anniversary campaign and Paul Andrew's vision for Sergio Rossi are just the beginning. With a revitalized team, we're poised to turn this pivotal moment into a decade of growth. Thank you for your time today. Now I'll hand it back for questions.

Thank you for joining us, and welcome to the Lanvin Group's 2024 First Half Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. Now please take a moment to review the disclaimers. During this presentation, the company will be making certain forward-looking statements, including, but not limited to future performance and the industry outlook. Forward-looking statements are inherently subject to risks, uncertainties and other factors, and they are not guarantees of performance. For today's presentation, I would like to introduce Eric Chan, CEO of Lanvin Group; and David Chan, Executive President and CFO of Lanvin Group. With that, I'd like to turn it over to Mr. Eric Chan to start the presentation.

Thank you. Thank you all for joining us today. I'm Eric Chan, the CEO of Lanvin Group. This year, just late last year, we remain committed to growing our brand by driving awareness and hit through our products. We will continue investing in developing our brands and their products and as such, I would like to welcome the new creative leaders who have joined our family, Peter Copping and Lanvin, and Paul Andrew and Sergio Rossi, both of whom are world class creative icons and bring tremendous energy and excitement to our Group. I would also like to take a moment to welcome Regis Rimbert, the new CEO of Wolford. He joined us in June 2024 and he brings us a wealth of experience in luxury, fashion and operations and I am excited for the path he will create for the brand. The story of the first half was the macroeconomic headwinds. Our entire industry faced, ongoing political instability as well as bearish economy signals were impactful in the first half of 2024. Just as they have started to be in the second half of 2023, additionally, the wholesale channel continues to be challenged globally and the challenges was further compounded by the macroeconomy headwinds. Lanvin Group and our brands will not immune to the top line challenges that prevailing market conditions present in the first half. However, while the story of the market was about macroeconomy headwinds, Lanvin Group story had not changed. We continue to focus to our product portfolio and generating brand heat and we continue to tactically expand our footprint in new markets while putting it trimming underperforming locations. We not only continue to improve our cost structure, but also took a proactive approach by implementing more aggressive, cost efficient initiatives to combat the macroeconomy headwinds. We continue to make progress on our path to profitability. We have improved our food price sell through, as well as inventory management to sustain our growth profit margin during a challenging environment. Additionally, we have remained focused on synergizing our fixed overhead to right-size our platform for the future. With that said, our Group revenue in the first half of 2024 was €171 million, representing a decrease of 20%. Our gross profit margin for the year remains steady down just 1% with gross profit totally €38 million. We continue to refine our operations and we plan to use this time to market ambiguity to further hone our cost structure. At the same time, we plan to invest in marketing and product development to set our path for tomorrow not only financially but creatively with the addition of the new talents who will help drive our Group forward. With that, I would like to turn it over to our Executive President and CFO, David Chan to go through some of the details.

All right, thank you. Thank you, Eric. Thank you for joining us today. I'm David Chan, Executive President and CFO of Lanvin Group. I'll be walking you through some of our brand's highlights to start. I'd like to direct everybody to Page 5 of the presentation. The highly anticipated announcement of the new Artistic Director, as Eric mentioned for Lanvin, was made in June of this year. Peter Copping, who will be joining Lanvin in September, brings a fresh view of couture and will help write the next chapter of a story history of the brand. Additionally, in the first half, the second edition of Lanvin Lab was released with a sculpture collaboration with world renowned modern artist Erwin Wuhr. The piece was designed incorporating a Pencil Cat Back as well as the iconic Cash sneaker. The monumental piece will tour five key cities in China throughout the summer. Moving on to Wolford, the brand opened its first location in the Middle East in Kuwait City. The brand has big plans for the region as it continues to expand its leisure and bodywear collections and will continue to pursue opportunities in emerging markets. Additionally, in the Middle East, Sergio Rossi opened its first store in Dubai Mall and plans another store to be opened in 2025 in Abu Dhabi. This is a testament to the growth opportunities of our brands see in the region and the resilience of the region in another challenge global market for luxury. Another significant piece of news for Sergio Rossi was announcement in July of the new Creative Director, Paul Andrew. Paul brings a unique view as a successful founder of his own footwear brand to the Italian [indiscernible] of Sergio Rossi. His innovative styles will bring a lot of excitement and the heat to the brand. Now moving to St. John. The brand held a number of successful marketing events in the first half of the year leading up to and after the launch of its new New York flagship store, the brand highly successful campaigns 2024 dovetailed a fantastic year of generating brand heat in 2023. The brand continues to grow its presence in new demographics and its performance has been elevated by new and younger clientele. Lastly, I would like to talk about Caruso. The brand saw a strong first half with its own Caruso brand and product lines. In the first half the brand also continued to implement new business development initiatives to build its Maisons business and also continue its profitability trend. Next, I'd like to point you to Page 6 to discuss our plans for the second half. Given the market headwinds for the foreseeable near term, all our brands will focus on cost efficiency initiatives to continue to drive margin improvements. To support our initiatives in the first half, we brought a new manager to facilitate operating cost efficiency measures. In the second half, we'll be adding new team members to our branch to affect changes and further adapt to market conditions. The Group will further invest in marketing for four brands. Lanvin, and Sergio Rossi in particular will focus on planning the highly anticipated first collections for Peter Copping and Paul Andrew, which will come in 2025. Despite the conditions of the wholesale market, the additions of Peter and Paul provide foundation for wholesale buyers and give creative direction and confidence to our upcoming collections. In the second half, the Group and our brands will work on further synergizing the cost base as well as aggressively culling the retail network. The plan to improve the ROI and marketing expansion initiatives with an eye towards new collections from Lanvin and Sergio Rossi. Now moving to Page 7, I'd like to highlight some of the Group's level initiatives we are undertaking in 2024 to support our brand. The Group has been working on a number of initiatives with strategic partners to develop product category expansion, as well as support our brand's global logistics. We are currently in development of a framework so that all our brands can be benefited from Group level service platforms. Similarly, we have been in discussion with a number of partners in the Middle East regions to support our brand's expansion in that region. The strength of the market in the Middle East and the strong brand awareness that our Group carries in the region provide great opportunity for expansion. Lastly, we continue to find opportunity to synergize back office function to reduce overhead and improve efficiency. Overall, the theme of the second half is setting out brands up to have a successful future in 2025 and beyond. And now going to the financial fundamentals. Please turn to Page 9 for a review of our revenue performance. The Group's first half revenue was impacted by the global softness in luxury, which was further compounded by the continued challenge in the wholesale market. For Wolford and Serge Rossi, however, two non-recurring impacts to top line in the first half also added to decline in sales. For Wolford integration issues with its new third party logistics provider caused shipment delays for extended period of time during the first half and for Sergio Rossi, planned reduction of third party production contributed to decrease in revenue. Moving to Page 10 on a regional basis, EMEA and Greater China saw the largest decreases in revenue at 27% and 24% respectively, while North America saw a more modest 11% decline. By channel, D2C revenue decreased by 14% and wholesale revenue, which continues to be challenging - challenged due to a global slowdown in the wholesale environment, was down 30%. From a margin standpoint on Page 11, gross profit margin held steady at just a 1% decline. The top line decrease was mitigated by better full price sell through and improved channel mix. Our effort to improve and promote better quality and higher margin revenue continued to yield fruit. Contribution profits were down due to the continued investment in marketing, as well as reduced absorption of retail overhead from lower revenue. Reacting to a softer market in the first half, our brand took measures to selectively invest in ROI maximizing marketing campaigns. Additionally, our brands made tactical expansions, particularly in the Middle East, of its retail footprint while further culling underperforming locations. The Group also took proactive measure to synergize G&A and the brand also contributed to reducing fixed overhead as you can see on Page 12 and 13. This helped minimize the revenue impacts with adjusted EBITDA going down only €1 million to €42 million loss for the period, a 3% decrease period-over-period. Turning to Page 14, as I mentioned, we continue to aggressively call our store network while opening stores in ROI maximizing locations. In the first half, we launched our first Wolford and Sergio Rossi stores in the Middle East and relocated our flagship New York City, St. John's store to a prime location on Madison Avenue. We reduced our overall fleet by about 21 stores and added open or relocated eight retail locations in the first half. For the rest of the year, we plan to implement additional initiatives to reduce costs and improve margins while continuing our tactical approach towards marketing and footprint and expansion with a focus on maximizing ROI. And with the additions of Peter Copping and Paul Andrew for Lanvin and Sergio Rossi, in particular, we will help build the brand's stories for the next chapter with our new creative leaders. Overall, we plan to build our future and gain momentum to maximize our opportunities as the luxury market improves. Moving to brand level performance I'd like to start with Lanvin on Page 17. Lanvin continued to manage through soft first half market conditions without an artistic director. This top line impact was further compounded by a contracting wholesale network. Overall, the revenue decreased by 15% to €48 million. The market impacts were felt in all regions but our efforts to further penetrate opportunity zones in APAC were successful with the region excluding Greater China seeing growth of 9%. From a channel perspective, D2C decreased 10% and as I mentioned the biggest contributor to the decline was wholesale which was down 23%. With the addition of Peter Copping, we believe the wholesale channel despite its general struggles will be revitalized for Lanvin moving forward, so we see a big opportunity. While revenue was down, I'm pleased to report the brand's gross profit margin increased from 56% to 58% from higher full price sell-through and strategic inventory management. The improving results are a testament to the efforts the brands have made to improve design, planning and material sources. Contribution profit remained at a loss of €9 million mainly stemming from the brand's continued commitment to strategically investing in marketing. However, below the contribution profit line, the brand improved its G&A by 29% and maintained its efforts to drive profitability. For the second half, the brand plans to drive retail foot flow and online traffic as well as increase conversion and transaction value. Additionally, the house plan to further optimize expenses through operational cost efficiencies to improve D2C profitability in preparation for expansion into new geographies. The brand will reinforce its leather goods accessory programs, expand its seasonal carryover items across product categories while activating recruiting new clientele and capture market share. With additional Peter Copping, the brand will also introduce new product styles to capitalize on momentum of its arrival in Q3 in 2024. Moving to Wolford on Page 18, Wolford had a unique situation in the first half which was significant revenue impact driver. Integration issues with this new 3PL resulted in delay shipments spending months and led to out of stock situations. The situation interrupted was otherwise a very successful global launch of the brand's W.O.W leggings which show exceptional sell through. The logistic issue has been resolved and the brand expects to recover in the second half. Gross profit margin decreased to 63% mainly due to the under absorption of fixed production costs due to lower revenue, as well as the planned liquidation of excess stock to improve the quality of its inventory. Contribution profit fell to a loss of €8 million for the period. Wolford's product evolution and increased breadth has set it up for recurring success. Already, the key leg wear products account for 38% of revenue and ready-to-wear and lingerie 46% and 15% respectively. These new product categories have revamped the brand, its margin profile. However, we understand that the situation at Wolford requires different approach to cost structure. As such, we are now joining Regis as the new CEO of Wolford in June 2024. Regis brings a wealth of luxury brand operating experience. He was spearhead efforts of strengthen the workforce and key support function with stronger leadership, as well as implement sustainable cost model for transforming supply chain distribution. For the second half, the brand plans to aggressively improve its cost structure, as well as store economics. But we'll also explore opportunities for expansion. Wolford opened its first store in Middle East in Kuwait City, and believes the region is ripe for expansion. With Regis expertise in international development, the brand would take a selective approach to capitalize on expansion opportunities. Moving on to Page 19, Sergio Rossi saw revenue decline, by 38% in the first half. The main driver was a decrease in wholesale revenue, which was down 60% overall, and it was impacted by twofold by a general stagnation of wholesale market, as well as a planned reduction of third-party production. The initiative to reduce third-party production stemmed from efforts to improve the overall white label offering, and rebuild it in higher margin accounts. As such, while revenue was down, gross profit margin saw a much more modest decline 2%. Contribution profit remains positive, landing at just under €1 million. For the second half, the brand will continue to improve the quality of its revenue, and further drive cost reduction, through operating efficiencies in manufacturing and supply chain. Additionally, Sergio Rossi plans to right-size its overhead at retail network to benefit current market conditions. On the product side, the brand is extremely excited by the joining of Paul Andrew. Sergio Rossi will spend much of its second half supporting Paul, as he helps to write the next chapter of the brand. Additional multimedia campaigns will be launched with a universal theme celebrating Sergio Rossi's heritage and self-affair, to support current collections as well as help prepare for Paul's first collection launching in 2025. Next, I'd like to discuss St. John. Please turn to Page 20. With less exposure global markets saw a decrease in revenue of 14%, North America, by far its largest market, saw a more moderate decrease of 10%. This decline was seen relatively even across all channels. St. John, being a few steps farther away our other brands, on other - our strategic paths of operating efficiency showed a significant improvement in - gross margin going from 62% to 69%. The strategy that have been implemented in 2023 have proven successful, resulting in higher full-price sell-through and better gross margin from improving channel mix. Contribution profit margin was also up from 11% to nearly 12%. The brand's efforts to revamp its product, and image have paid off. The story of its first half of St. John was a highly successful campaign advance that will help as well as the launch of its new flagship location in New York City. The brand refresh and effective marketing campaign, have attracted a whole new younger demographic to the brand, and can be seen by the - marked increase in social media followers. For the second half, St. John will continue to stoke its brand heat, while driving its basic product lines. Additionally, the brand will optimistically hone its cost structure, by right-sizing its retail network and overhead. Lastly, moving on to Caruso. Please turn to Page 21. Caruso had an impressive first half. Despite macroeconomic challenges, the brand held the ship steady with only a slight decline in revenue, which was down only 1%. The brand saw a reinvigoration of its episode Caruso product line, which grew by 21% with a robust performance at both ready-to-wear and made-to-manage service. The Maisons business faced a lift, a bit of slowdown due to current global condition impacting its client. Gross profit margin increased from 26% to 29%, from improved in-house product production efficiency and reduction of outsourcing. Contribution profit margin also increased from 22% to 24%. For the second half, Caruso plans to revitalize its Maisons business with additional business development initiatives. Additionally, it will implement new employee initiatives including the 360 organizational review and ESG action - plan, to enhance team member loyalty, participation and growth. At this point, I'd like to have Eric provide some final remarks.

Thank you, David. To close our results call, I would like to highlight some key takeaways. First, we faced a challenging first half of 2024, both externally and internally. However, we remain resolved in our mission to grow our brand, and to grow our profitability. Our proactive approach mitigates some of the impact, but we plan to drive continued improvement in the second half. Second, we welcome some exceptional leaders into our family, both on the creative and the business side. And I'm extremely excited about our future. Thirdly, while I anticipate continued softness in the luxury through the second half, we will be positioning our brands to capitalize on improving market condition, by continuing to strategically invest in marketing and positive development. And the fourth, our approach to our retail network will continue to be tactical. We have located a number of opportunity zones for each of our brands, and we look to expand our footprint aggressively, but judiciously. I would like to conclude by saying that Lanvin Group, is committed to its brands and our strategy, to improve our top line and profitability. On behalf of the new entire management team, thank you for listening to the presentation.

[Operator Instructions] The first question today comes from Tracy Kogan with Citi. Please go ahead.

Thanks, guys. I was wondering if you could talk about, how business trended through the quarter, if there was any difference in performance - I mean through the half, if there was any difference in performance as the period went on. If you ended on the lows or the highs, just any comments you could make on trends by month? Thanks.

Oh, thank you, Tracy, for the question. Good to hear from you. Yes, I think I can provide some general remark. I think we obviously, as we mentioned in April, our - the pressure point started in the second half of last year, we saw a little bit of uptake in the, I would say, the first quarter. But I think we do see a pretty clear path in terms of kind of pressure in the second quarter. It started probably sometime in end of April, kind of early May, that time period.

And was that pretty consistent by region which, was there one region? It seemed like the North America held up - better overall. But just wondering by region, if there was any difference in performance by month?

Hi, this is Eric. In fact, it's pretty consistent across most of the regions, I mean, from the Asia Pacific to the EMEA - to the American market. We think actually the macroeconomy headwinds actually hit all the regions, I would say, except some very particular markets we may see, because of particular reasons. I mean, that's less hit, for example like Japan, because of the currency or the Middle East, which is an up-and-coming markets. Other than that, basically, it's pretty consistent.

Great. Thank you, guys.

You're welcome.

[Operator Instructions] There appear to be no further questions at this time. And this concludes our question-and-answer session, which also concludes the conference call. Thank you for attending today's presentation. You may now disconnect.

Thank you for joining us and welcome to the Lanvin Group's Fiscal Year 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Now please take a moment to review the disclaimers. During this presentation, the company will be making certain forward-looking statements, including, but not limited to the future performance and the industry outlook. Forward-looking statements are inherently subject to risks, uncertainties and other factors, and they are not guarantees of performance. For today's presentation, I would like to introduce Eric Chan, CEO of Lanvin Group; and David Chan, Executive President and CFO of Lanvin Group. Siddhartha Shukla, Deputy Chief Executive Officer of Lanvin Brand and Silvia Azzali, the CEO of Wolford, and Andy Lew, the CEO of St. John. With that, I would like to turn it over to Mr. Eric Chan to start the presentation.

Thank you for joining us today. I'm Eric Chan, the CEO of Lanvin Group. Since joining the group in 2023, I have had a chance to meet some extraordinary people. As I've always said, the managers drive companies and their teams drive results and thoroughly, impressed by the effort of our managers and our teams to maintain the growth and continue to forge the path of profitability in a challenging market environment. For 2023, we contribute our trend of growth by achieving revenue of €426 million compared to €422 million for 2022, representing a growth of 1%. Our three-year compound annual growth since 2020 was 24% with all our brands maintaining double-digit growth over the three year period. Our gross profit for the year increased to €251 million with our margin improved to 59% versus 56% in 2022. We continue to optimize our cost structure in 2023 with multiple initiatives and expect improving results throughout 2024. In 2023, our brand continued to raise awareness and stocked brand heat with targeted marketing campaigns, powerful collaborations and effective service offering. We believe luxury fashion is not just a product but an experience in lifestyle if you will. As such, we have focused on creating an ambiance for our clients that goes beyond the point of sales to the experience of living with our brands. We state those emotion into our clients in 2023 and in parallel, we made significant progress in enhancing our delivery vehicle from improving our retail footprint to the kickoff of our US digital platform. Over the past few months, I have visited many of our new location. With each visit, I find myself increasingly excited about the growth of our retail base and the opportunities that exist to expand it. The opening of our first B2B long-time project in Reno, so a lot has come better -- a better time with the brand keeps that has been generating throughout the Lanvin’s for the launch and [indiscernible] The regions actually shared enough of our brands than I do and that is much we can accomplish in the Middle East. Therefore, I am pleased to say that we are developing with another two of our brands to introduce new projects in the Middle East in 2024. Moreover, as David will discuss later in 2023, we continue to leverage our strategic partnership ecosystem. We have piloted with the best-in-class operations of distribution retail, profit development and material sourcing around the world. We continue to seek new strategic partners to develop our ecosystem and improve our product offerings and service. All of these facades drove our financial results. As you will hear, our financial performance continued to improve in 2023, I was most impressed by our revenues during the Chinese New Year, we were able to adapt to changing market environments and changing trends. Although, headwinds may persist in 2024, I'm confident in our ability to stay on track and to achieve our goals. With that, I'd like to turn it over to our CFO, David Chan, to go through some of our details.

Thank you, Eric. And I'd like to thank everybody for joining us today. I’m David Chan, the Executive President and CFO of Lanvin Group. Before we get into the results, I want to make a few high-level points. I think back to the beginning of Lanvin group and our journey and how far we've come, what sometimes gets forgotten is that we have embarked this in 2018. We were starting a new platform with a distinctive concept of being an Asia-based global luxury group. We were in essence a startup. Since 2018, we have put together a strong ecosystem of strategic partners that help us with production, distribution and development. Furthermore, we have built an energetic platform that each of the brands contribute to and benefit from. We've also built a backbone of the Group, a shared service that benefit all our brands. Most importantly, we've put together a resilient group of managers and team members to continue to deliver growth regardless of the challenges they face. In 2023, we continue to build our platform by delivering growth in challenging environments, transitioning the creative strategy at our flagship brand and further driving margin improvements. Throughout 2023, we continue to make changes and add in the elements necessary to reach profitability. Among our 2023 achievements, we established a fabric center that jointly created with our strategic partner that is a world-class fiber development company. Additionally we started the U.S. digital platform to enhance our e-commerce offering and logistics in North America for our brands. All that to say, when I review our group's 2023 achievements and results it gave me confidence that we remain on track to reach our profitability goals. With that, I'd like to discuss Page 4 and 5 of our presentation. The group grew its revenue despite macroeconomic headwinds. A key highlight was the Lanvin brand's ability to improve its growth trend in the second half of 2023 while market condition grew steadily worse. Additionally, we showed a strong growth in APAC region with nearly 8% growth and Greater China growing by 9%. One of the key pieces of our DTC channel e-commerce posted a gain of 3% with the growth with group leveraging its U.S. digital platform an indication that our digital strategy is paying off. Furthermore we continue to improve our retail footprint improve store productivity putting our fleet of doors in the best position they have ever been in to facilitate our expansion strategy. As an example, another highlight in 2023 was the opening of Lanvin's middle -- first Middle East boutique in Riyadh. We are we were extremely excited to open our first location and region have plans to open additional boutiques for all our brands in 2024. Another key achievement in 2023 was the reacquisition of Lanvin's brands Japan license and trademarks. The strength of Lanvin in Japan is a testament to the power value of the brand. We're excited for the opportunity to drive further development of Lanvin Brands in Japan. Overall the story of 2023 for Lanvin Group was about our persistence in delivering growth and improving profitability. The overall growth for the Group an improvement in the quality of our revenue allow us to improve our margin, with gross profit margin improving by over 250 basis points contribution profit margin improving by 255 basis points and adjusted EBITDA margin increasing by near 200 basis points. Our brands made significant progress in 2023. And with that, I'd like to turn to Page 12 and introduce Siddhartha Shukla, the Deputy CEO of Lanvin Brand and discuss some of the Lanvin's highlights. Sid?

Thank you, David. For Lanvin 2023 was indeed a fruitful year continued transition with a persistent focus on long-term brand and business building. After several years relative instability. concrete actions have been executed systematically from the inside of the organization out in establishing, first, a clear brand vision and business strategy. Second, a strong infrastructure of talent to support development and innovation. And third, a diversified global business that has stabilized and is now poised for growth. In a market context where the global wholesale and digital multi-brand channels were quite strained and in contraction, the house was nonetheless able to improve its sales trend in the second half, as David mentioned, with targeted product and marketing campaigns executed via direct channels. Despite a softening top line versus 2020 to seven points negative, the company delivered operational efficiencies through a calculated rationalization of expense levels, improved gross margin at plus eight points versus the previous year due to a favorable channel product mix and a focus on full-price selling, all of which sequentially improved loan funds contribution profit. In April as part of the new merchandising strategy, the House announced a creative reorganization to be powered by singular vision framed by the rich heritage of France's oldest couture house and our founders and Lanvin contact of the [indiscernible] team the ultimate [indiscernible]. Alongside the foundation of men's and women's ready-to-wear collections, two new vertical organizational structures were established; one, fully dedicated to leather goods and accessories and the other to the advent of Lanvin Lab. The final step in this holistic reorganization will come with the imminent appointment in the second quarter of 2024 of a new artistic director for the collections. It still means that leather goods and footwear business saw important progress driven by key product initiatives in the second half notably such as the relaunch of the iconic ballerina flats, the curb sneaker collaboration with the surgeon and the pencil box campaign featuring global brand ambassador Cheng Yi. All of these products have now firmly become Lanvin icons. The first edition of Lanvin Lab was successfully launched in the fourth quarter with the acclaimed Grammy winning artist Future, an experimental space for the cultural expression of the brand, Lanvin Lab has already proven to be a dynamic international platform confirming Lanvin outside brand equity and far-reaching influence. The second addition of Lanvin Lab a monumental public sculpture by the Austrian contemporary artist, Erwin Wurm has just been launched in a six city tour across Mainland China. As concerned network expansion the retail footprint saw a net increase of five new boutiques including the brand's new concept flagship boutique on Madison Avenue in New York. And as David mentioned its first freestanding boutique in the Middle East in Riyadh, Saudi Arabia. 2024 promises new openings in Cannes, Galeries Lafayette in Paris and the debut of digital marketplaces with select retail partners around the world. Thank you all for your time. And with that I will turn it back to David.

Thank you. Lanvin accomplished a lot in 2023 and I'm eager to see what we can achieve in the coming 2024. Now I'd like to introduce Silvia Azzali to discuss Wolford.

Thank you, David. I am Silvia Azzali, the CEO of Wolford and I am happy to share the remarkable achievement of Wolford in the year 2023. Despite significant challenges, our commitment to improving profitability announced last August has yielded fruitful results marking a pivotal moment in our journey. It means an improvement of more than €10 million compared to 2022. This year marks the culmination of our significant restructuring efforts initiated in 2022 and underscores the dedication and resilience of our team in navigating turbulent market condition and executing strategic initiatives with precision. And I am saying that because our journey to this significant improvement was not without its obstacles. We navigated through challenging market conditions characterized by geopolitical tension and inflationary pressure. And last but not least an extreme warm weather [indiscernible] until November which significantly delayed the start of the fall season that for represents more than 60% of our sales. Because of all of that Wolford achieved a modest 1% same-store sales growth in 2023 following three consecutive years of double-digit growth. Particularly, noteworthy was the double digit increase of 11% in the wholesale revenue attributed to strategic collection alignment by our new Artistic Director, Nao Takekoshi and the acquisition of significant new wholesale customer. The Asia Pacific region report an impressive 32% growth, while the India region faced macroeconomic challenges. Contrary to wholesale, retail faced pressure with an overall lower overall decline by 3%. As say, the second semester sales were soft as impacted by unexpected adverse weather condition and tension in the growth area which dampened sentiment among European and American consumers. Despite this challenge, we are pleased to highlight successful new openings including IFC in Hong Kong and pop-up store in Istanbul and the refurbishment of Bal Harbour, Miami, Frankfurt Airport and Milan. These flagship stores now showcase our new store concept f W.O.W. for lounge signed by Nao Takekoshi reinforcing our commitment to elevating the retail experience for our customers globally. Even though sales were soft in the second half of the year, we improved our profitability without only cutting costs. In 2023, workforce celebrated several significant achievements that reinforced our brand presence and refinance in the market. Our company will grow starting February successful partnership with number 21 and John Thompson [indiscernible] and the launch of our new website in November, all contributed to bolstering our digital footprint and announcing the customer experience. Digital sales maintained a stable 19%, showcasing the resilience of our brands. Last thing that makes me especially proud is the introduction of our Revolutionary W.O.W. Leggings further underscored our commitment to innovation, driving an impressive 137% growth in Leggings compared to the previous year, and solidifying our iconic the W Collection as a cornerstone of our brand strategy. Through strategic restructuring efforts, we significantly reduced our [indiscernible] costs resulting in a reduction of operating expenses by €9.6 million, while continuing investing in strategic assets like omnichannel, people, store innovation. Looking ahead we remain optimistic about the future with a solid foundation in place achieve in 2023. We are poised for continued success in 2024 and beyond. Thank you for your time. And with that I'd like to turn it back to David.

All right. Thank you, Silvia. I'm pleased to – pleased with the steady growth and process – progress W.O.W has made in 2023. The new leggings are truly one-of-a-kind and represent a W.O.W for is all about. At this point, I'd like to introduce Andy Lew, the CEO of St. John to discuss some of their 2023 achievements. Andy?

Thank you, David. I'm excited and eager to share our 2023 results, as well as mention some of what 2024 has in-store for St. John's. While 2023 started strong many global businesses hit headwinds in the back half of the year. We are proud we have maintained DTC revenue growth for the fiscal year. The year was truly transformative, as we updated our supply chain to improve operating efficiency. The transition continues to unfold smoothly, as we focus on the highest standard, which our clients not only deserve but candidly expect from us. We continue to refine our wholesale partnerships such as [indiscernible] given our relationship to an alternative style where we control inventory align – allowing us to better showcase the breadth of our assortment and work with DSAs in each location. We are increasing this model in order to directly control our businesses. With our clients top of mind, we launched our foundation collection at the very end of 2022, creating must-have essentials as the building blocks of one's wardrobe, perfectly paired with our more classic pieces within its first full year [indiscernible] has grown to 23% of our overall business. We've since added [indiscernible] an additional color ways to expand that category. Our retail team saw 10 of our top or job stylists sell over 1 million each. Of that four were over $2 million. This aspect of clienteling is a big focus as we open four new boutiques in 2023, with additional relocations ahead. Our Own Your Power campaign was a first for us and creating a powerful message focused on digital and streaming by partnering with Hollywood's Shonda Rhimes. We're able to not only work with an existing client but choosing John fan to speak to who we are today. Celebrity stylist and consultant Karla Welch has been an incredible collaborator with the team from shoots, designs, events and brand awareness that help drive sales. Collaborations such as our recent Edie Parker at St. John handbag capsule important ways to further diversify our product offerings through price points and categories. We purposely cut the launch event instead of focusing on the digital campaign, shoot on actress lead serve to bring in new demographic and create heat. As we look ahead, we are updating our e-commerce platform to Shopify to make us more agile on the features to improve the online experience. Not only does this benefit St. John's, this provides a synergistic platform for all of Loveland Group in its e-commerce and distribution in North America. Having been with Saint John a part of the long bank group since 2021, I can tell you we haven't had a significant e-commerce presence in North America. The development of our US digital platform is a big help for not only Saint John, but also for the group. We now have an efficient way to centralize logistics improve customer experience which all of our brands -- which helps all of our brands in the long run. We are also thrilled to be reestablishing new flagships in key US cities Madison Avenue and New York, Brighton way in Beverly Hills and Post Street in San Francisco. These are major shopping destinations which adds to our retail footprint. We are working diligently to build philanthropic partners and a community around our boutiques. These events in alignments have been key to that engage current new and lapsed clients. These efforts will strengthen our business in North America, so that we can then focus on growing in the rest of the world and explore new partnerships. At St. John we are committed to empowering company women to look and feel the best through luxurious style, software designs and unmatched quality. We feel lucky to have Lanvin Group behind us on this mission. Thank you and I'll give the floor back to David.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Tracy Kogan from Citi. Please go ahead.

Hi, good morning. Thanks everybody. I was wondering if you guys could talk about performance year-to-date in 2024, since we're so far into the year and maybe kind of characterize that performance by region. And then I have a follow-up. Thanks.

Hello. Pardon me. I joined about Dave and Eric signed back in.

Sorry, Tracy, we -- I got dropped off. So we actually now done that's maybe another maybe 10 minutes to for the reports. So maybe hold off on the Q&A session. Just put a little bit. Sorry, about that. Okay. So thanks Andy for introducing John. So I'd like to move to Sergio Rossi, as Sergio Rossi 2023 was also a transformational year with the hiring of a new CEO, Helen Wright to lead effort at the iconic brand. In addition to new leadership, the brand expanded its customer demographic by revitalizing its brand image and with a strong product launches that included the iconic Mermaid and Steve Rossi collections. The brand also initiated new events to enhance customer engagement and grow brand awareness and target campaigns in key geographic regions. These efforts led to revenue growth of 70% in North America, a key region of growth for the brand. Additionally, e-commerce grew over 5% and like-for-like growth by revenue growth was up over 6%. Additionally, Sergio Rossi's white label offering which is that its third-party production business remain a focus of the brand's industrial facilities. In 2023, with the intention of making it an increasing piece of the revenue mix, during 2023, the brand began to strategically emphasize and enhances white label business to promote year round capacity utilization, improved volume and productivity and take advantage of its unique production capabilities. Next, I'd like to discuss some of the achievements of Caruso in 2023. The brand had a strong year of growth and margin improvement. Caruso achieved a significant milestone of adjusted EBITDA breakeven for the 1st year by driving strong results in its Mizone business improving its service offerings and Made to Measure business through the expansion of its production capabilities and specialized teams and improving supply chain strategy in a period of offer scarcity in a men's sportswear industry. Additionally, the brand launches the e-commerce business of first to Caruso. These changes that Caruso has implemented a significant and provide extremely strong foundation for the brand's growth and profitability in the years ahead. Moving ahead without all our achievements in 2023 behind us, I'd like to highlight our outlook for 2024. We expect continued macroeconomic challenges this year, but we're confident our strategy will lead to continued growth and profitability in 2024 our strategy will remain the same focusing on improving and expanding scales as profitability. We plan to approach the market to tactically to capture opportunities in the same fashion we did with each of our brands in 2023 with our methodical and tactical strategy. As I mentioned, one of our core brands achieved adjusted EBITDA breakeven in 2023 and we expect two additional brands achieved that goal in 2024. Taking tactical steps allow Karusel to expand its production capability to capture additional market shares and drive profitability. We will continue to take the same approach with all our brands. Furthermore, we plan to focus on development of our strategic ecosystem. I've talked about our ecosystem a lot in the past and continue to emphasize it as a point of differentiation for Lanvin Group. We have strategic partners throughout the world to help us with variety of business facade from production to distribution we plan to add more partners to facilitate regional growth, improve logistics, and expand product categories in 2024. We're fully engaged in our near-term goals, but we are also looking at bigger picture of what our brands and our platform can be and will continue to align our strategies to achieve balanced SaaS and brand growth and profitability. Now, I'd like to touch on some of details of our financial results, starting on Page 20. As I mentioned, we continue to drive growth year-over-year with our compound growth annual growth rate since 2020 at 24%. On the next page, you will see that we continue to strategically target regions where we want to emphasize our growth including North America, the Middle East, and Asia. I mentioned earlier that we opened our first Lanvin boutique in Rio. This is just the beginning of our expansion into the region and we have plans to add additional Lanvin door in the Middle East. Our brands have significant awareness in the region. And as I mentioned, we have plans to work with strategic partners to accelerate our footprint development. Furthermore, we view APAC and in particular Greater China as an opportunity to gain market share. The penetration rate of our brands are still small. And as evidenced in 2023, our near double-digit growth in Greater China was a testament to our ability to take market share. Another highlight for the region in 2023 was the reacquisition of Lanvin Japan license in March. Lanvin's business in Japan was twice over the past two decades and they were very pleased to able to -- we were very pleased to be able to reacquire license and trademarks. We now have the ability to further drive development and growth in Japan and we're excited for opportunities that are available in country. Moving to Page 22, we continue to pursue growth in our D2C channel through retail expansion and growth in e-commerce. We have taking a tactical approach to the wholesale channel as we view it as a staple of our distribution strategy, but one where we need to refine our partnerships given the challenges that the wholesale channel is facing industry-wide. The group revenue by channel was generally flat, but the group did have an increase in other revenue from the reacquisition of Lanvin's Japan license and associated royalty income. Next, I'd like to quickly touch on our retail footprint. With the changes in our product mix and product offerings in 2022 and 2023, we have established a blueprints for our boutiques moving forward. This require additional the rationalization of network and we'll see on Page 23 that we further reduce our footprint in a process of cooling the fleet of prepare about -- to prepare to expansion strategy. While rationalization of network is ongoing process, one thing to note is that we began to expand Lanvin's footprint in 2023 with a total of five net new stores. One additional point I'd like to make is that while our total base of stores decreased by 12, we maintain our D2C's channel revenue at a steady level, a testament to our improving unit economics. Moving on to Page 24, I'd like to discuss the group's improving profitability. We achieved record gross profit margin for the group lending and 59% for the year for €281 million, up from €238 million at 56% margin in 2022. This was driven by a combination of changes in our product mix and balance of accessories versus ready-to-wear and changes in our distribution channel mix. In 2023, the group continues effort to focus on margin-enhancing product categories as a basis for the future. Additionally, with continued efforts to efficiently manage variable costs, including selling and marketing, the group's contribution profit nearly doubled from €13 million to €24 million at the margin of 6%. You can see that this is to focus on our variable margin that has yielded the desired result with nearly all the gross profit and contribution profit gains falling due to the adjusted EBITDA line. Adjusted EBITDA continued to improve in 2023, with a margin improvement nearly 200 basis points. Furthermore, as I mentioned earlier, Caruso achieved breakeven adjusted EBITDA in Q1 2023 and two additional brands are expected to achieve adjusted EBITDA breakeven in 2024. While the Group has focused on rightsizing the cost structure, we are seeing our results increasingly improve from optimizing the product and channel mix. 2023's performance makes us confident that we're nearing the inflection point, where we can focus more on expanding our scale, to accelerate our path to profitability. Next, I'd like to touch on working capital efficiency on page 26. As you can see, year-after-year, we continue to improve our working capital efficiency. In 2023, for the first time, we had a cash conversion cycle of less than 100 days. Throughout this webcast, I've emphasized our focus on profitability, but want to be clear that we view cash flow efficiency as an equally important objective. To recap in 2023, we continued on the path we outlined in 2018, with growth and significant improvements in profitability and cash flow efficiency. We continue to pave the way of our future and are optimistic for continued improvement into 2024. Now, I'd like to highlight some of the brand-level financials, starting with LANVIN. Brand underwent a creative transition in 2023, in the face of a softening Global Luxury market. However, as the market condition worsened management was able to improve its sales trend in the second half, through our successful product launches and marketing campaigns. The brand landed at a revenue decrease of 7% of the year -- for the year, an improvement of 11% decrease in the first from a -- from an improvement from the 11% decrease in the first half of 2022. Most of the decrease came from the Wholesale channel with Wholesale facing difficulties Industry-wide. Lanvin showed its Brazilian, with the ability to improve its gross profit margins significantly from 50% to 58% by enhancing its product mix and heavy emphasis on accessories, as well as better full price sell-through. Gross profit increased by €4 million in 2023, and as you can see, most of that drop to the contribution profit line. Moving to Wolford. Since Silvia provided details on financial result, I'd like to only point out a few additional highlights. Wolford has had the most significant change to its retail footprint with introduction of the new legging and continued emphasis on a leisure product being the future of the brand. The Wolford name is sum of Phenomenal Technology and Product Development. Returning to the strategy has proven successful. And with that change, we started modifying the merchandising blueprint in 2022, leading to the changes in Wolford's footprint. So far, the strong uptakes in both of these product lines have improved the quality of our revenue and profitability which makes us confident that we will make the right strategic decisions. Next, I'd like to discuss the financial results for Sergio Rossi. Revenue decreased by 4% to €60 million, due to a decrease in white-label third-party protection sales which the brand includes as wholesale revenue. Conversely, the DTC growth grew with Sergio Rossi brand increasing revenues. In particular, in APAC, leveraging brands post-pandemic momentum and by improving its marketing efforts, the brand saw growth in Greater China as well as double-digit growth in Japan, Japanese wholesale accounts. Sergio Rossi, improve its gross profit margin and contribution margin. And its brand revitalization marketing efforts and product launches in Jan 2023, contributed to higher margin sell-through. The brands do have room to improve by streamlining the supply chain and production efficiency with a key focus on accelerating its speed-to-market with this product. As I mentioned, starting in 2023, efforts were made to enhance and emphasize Sergio Rossi in white-label business. And this will be an important façade of the brand going forward. Moving on to St. John, as Andy mentioned earlier, significant progress was made by the brand in 2023. From operation no efficiencies-to-marketing improvements, the brand drove 5% growth land at €90 million for 2023. DTC revenue grew 7%. And more impressively, the brand saw e-commerce growth by 14% with a use of the group's digital U.S. platform. We do think John is a good test case for our U.S. digital platform. And I'm pleased to see such strong results. The DTC growth led to gross profit margin improving 62% in 2023. Additionally, the refining of this wholesale partnerships also contributed to better gross margin. Finally, I'd like to discuss Caruso, Caruso had an impressive 2023. The brand was able to improve its production efficiency and expand its production capability to take advantage of the advantage of the offering scarcity in the market. For men's sportswear revenue increased significantly by 30% to €40 million in 2023, further improving its growth trend from 2022, which was also impressive 25%. Gross profit was up by €4 million to €11 million from €7 million and a margin of 28%. And contribution profit margin improved significantly as well as going from 18% to 24%. Caruso this impressive improvement through its Maisons business, which grew by double digits. In 2023, the brand showed that the groundwork that has been laid to expand scale and improve operating efficiency and production capability yielded significant results. As such, Caruso also achieved break-even, adjusted EBITDA in 2023, a significant milestone. We anticipate continued growth in revenue and profitability as Caruso further develops its business and captures additional market share. At this point, I'd like to have Eric provide some final remarks.

Thank you, David. To close our result call, I would like to highlight some of the key takeaways. First, in 2023, we enter a challenging macro economy environment. We expect the headwind will persist in 2024. However, the resonance that our brands and our teams showed in driving our financial results in 2023 is a testament to our resource and also to the strength of our brands. Second, there is a significant room to grow in many of our geographic regions, so we will continue to focus on balancing our regional growth to take advantage of opportunities at both our retail doors and online. Thirdly, we continue to drive profitability improvement throughout our organization and are able to show the fruits of our labor through our improving gross profit margins and our increase in contribution profits. Lastly, we are nearing an inflection point, and we have laid the groundwork for accelerating the footprint growth and market share gains. And now we have the ability to capitalize on the operating leverage we have built in our group to amplify our profitability. My team, along with our brand managers, remains resolute in our mission to grow our brand and to drive the profitability and cash flow efficiency. Lanvin Group and our brand have a provenance and heritage second to none. And I'm proud of what we have accomplished until 2023, and we are collectively on a journey, and I'm very optimistic about our future. Thank you.

Thank you. We will now begin the question and answer session. [Operator Instructions] Our first question comes from Tracy Kogan from Citi. Please go ahead.

Hey, thanks, guys. I will ask the same question I asked earlier, which was I was hoping you could give us a sense of how your business has trended year to date and maybe talk about that regionally. And then I have a follow-up. Thanks.

Yeah, I can. Thank you, Tracy, for the question. Hi. And I think our business is like a lot of other brands. I would say in the macroeconomic, we are, you know, in 2023, I think we landed pretty resilient results. But in Q1, we do see a, I would say, a general kind of a softness in the market, including some of our brands, right? So I think that's why I mentioned a little bit in our script, we are -- all our brands are really just to have to re-shift some of the strategy, right, whether it is, you know, creating products or marketing that is more tailor-made to this particular kind of macroeconomics that we were facing. So to attract, entice certain audience, right? So maybe I don't know if Eric or maybe even the more representative brands for Lambon, right, is that the very -- we saw a kind of a trend coming for the broader luxury market in the second half of 2023. That's why, we've shifted our strategy to some of the capsule and marketing maybe Sid, can give a little bit more examples on this to Tracy's question including some of the product launch or kind of collaboration we did in the second half of the year which continued into the 2024. Right. Sid, you want to you want to take this a little bit.

It's -- first -- sure. Yes. I mean I think what I would say is that just -- fully aligned with what you've said, but I say despite that we remain very optimistic, that we have a year of hard work, some of our key initiatives are going to bring share that we know exist and it's just about being more surgical and drilling into those opportunities. So particularly, with the launch of Lanvin Lab last year which continued into this year as you mentioned David, into Q1 and Q2, we see strong selling from that. As well as more of our core commodity icon businesses in the relaunch of women's formal shoes or even then leather goods where we've seen a remarkable -- despite the global environment, a remarkable resilience and even on a regional basis, very promising signs of growth in leather goods. So, I still feel very optimistic that we have opportunities on a channel and product level to unpack and that we'll be able to do that before the end of the year.

I think you just said that the Lanvin Lab, you had a second – the second drop of the Lanvin Lab and I'm wondering what you're seeing from that. And is Lanvin Lab is – is that a higher margin business because it's more fashion-forward? Or how does that -- how does that shake out overall on the margin side?

Yes. Sid, do you want to take that

Probably, sure. And so two parts of the question. Indeed, it was phased in three drops. And so the second and third drops took place in the first quarter of the year, and we'll continue selling through the first quarter, sorry, through the first quarter and they will still sell through the first half. The important thing about Lab is that, there's not a single recipe to it. It's really about an acknowledgment of Lanvin being a cultural brand as much as it is a fashion brand. We see that throughout the marketplace, and lab is in place for us to situate those projects and make sense of them. They certainly can provide very interesting sources of revenue, but they're not necessarily only about that. The second the second edition, of Lanvin Lab, which I also mentioned is an artistic project, which absolutely supports our business, but in a very different way and through an experience as opposed to an actual collection. Specifically on the first edition, Tracy and as that was linked to a very renowned artist, it's true that it provided a nice source of additional revenue in the year and also some cultural affinity is that the brand absolutely owns, two demographics beyond sort of the traditional; sophisticated occasion wear driven demographics that Lanvin is known for. And so, we see that performing well notably, because as the projects have a dynamism built into them this project -- the first edition was with a musical artist, who has just dropped an album that has three songs trending in the top 10 on the billboard charts. And that obviously, is important to us because it drives a lot of heat and attention to what will be the second and third waves in stores now.

Great. Thank you

Thank you, Sid.

My follow-up -- My follow up David is just on CapEx. It was up significantly this year and I was just wondering, what the drivers were. I mean I know you have more, you had more store openings this year and so I wasn't sure if it was that or if there's more IT or all of the above? And then just wondering, what you're targeting for CapEx for 2024. Thanks a lot?

Yes. I think we still want to keep it pretty consistent. I think at the single digit percentage of the sales, I think -- a lot of the effort that you see will be still coming from rationalization. What you see in -- towards the end of 2023 kind of, we have a net loss of stores, right? That will be -- we will -- we'll continue to see that. And then as I mentioned before, a lot of these action will be seen in Wolford, because we are -- we are seeing a Wolford especially with the success of these leisure wear and the legging, we're moving more and more biggest kind of a different type of stores front to introduce Wolford to our customers.

Got it. Thank you guys. Good luck.

Thank you. Tracy.

[Operator Instructions] Our next question comes from Doug Lane from Water Tower Research. Please go ahead.

Yes, hi. Hello everybody. Just wanted to stick on the margin trends here. They've been heading in the right direction pretty much across the board, which is good to see. I just wondered if David stepping back here. Do you have a target for a group-wide breakeven on EBITDA margin, and maybe if you could discuss a few key initiatives underway to get there?

Thank you Doug for the question. We do know. I think we are, if you follow us a couple of years ago. We were we're aiming for adjusted EBITDA breakeven by 2024. However there is a delay I would say now we are re-looking for a cash breakeven at a group level by 2025 and the reason being is really we didn't foresee a macro economic headwind starting in the second half of 2023. So that's one way to look at this. And then in terms of the where the key initiatives that you mentioned, I mean obviously if you see our product mix for at the group level. Okay. If you talk about Longmont [ph] is only probably one of the few brands that we have accessory capabilities. However, we are focusing more and more on the accessory and leather goods business, especially when Siddhartha mentioned during his speech, we created this division particularly focus on this category. So that means you can see that this group -- the group strategy and initiative to really to drive the higher gross profit margin by having less seasonal products and less ready-to-wear, ready-related products to improve the inventory turns, the OTB and the merchandising strategy. And then the second part of the initiative would be is going to be the channels. We are very selective now, if you ask all the CEOs on the call we've been very selective in terms of our wholesale partners, and then we are really focusing on the D2C model, especially our retail and obviously the dot-com business that we control. And these channels will yield better gross profit margin in general. So we have a little bit more inventory pressure. However, we do believe in the mid to long-term better for the brands.

Okay. And then…

Yeah. Sorry Doug, one last thing, and then -- so not just to focus on the margin and top line. Obviously this will -- we have a couple of these factors with the macroeconomics. The group has -- in Silvia’s speech or even Andy speech, you will sense each brand is still doing their job in terms of making sure the cash efficiency and operating cost efficiency still being rationalized. So on one hand, we are building our revenue and changing product and changing channel mix. But on the other hand we're trying to rationalize the cost. So these two kind of main overarching thesis’s will yield we believe, and we do the right way will yield our positive EBITDA and positive cash flow in the next 18 months.

Okay. That's very helpful. So, it sounds like looking at the recent trends, the marketing and selling expenses have settled into low to mid 50% range, and it's really at the cost of goods and the G&A where the opportunities are, is that where w should continue to see deleverage on the cost front?

Yeah, I do believe so, because unfortunately our brand came out of our restructuring in 2018. We continue to invest in our brand. The easier way is to cut all marketing, and cut all the selling expenses and we become breakeven sooner. But I think that is pretty damaging for all the brand equity. So you will continue to see our investment in the brand marketing and selling expenses.

Okay. That's helpful. Thanks Dave.

Thank you.

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