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.