Lanvin’s parent company Fosun’s share price plummets

By

Olivier Guyot

Translated by
Nicola Mira

Published
Sep 15, 2022

Have the Lanvin group's expansion plans just had their wings clipped? Chinese group Fosun, owner among others of Lanvin, Sergio Rossi and Wolford, predicted a return to profitability in 2024, and was aiming for a Wall Street listing, but the latest news coming from Asia have raised doubts about these plans.

On Wednesday, the share price of Chinese private conglomerate Fosun, parent company of the French luxury label and also of Club Med, dropped to its lowest level in nearly a decade after the press announced its debt is being reviewed by regulators, despite the group's denial.

The share price for the group's main company, Fosun International Limited, lost up to 9.6% in mid-session on the Hong Kong stock exchange, trading at HKD4.41, its lowest value since November 2012. This price dive reflected the investors’ nervousness following a report by Bloomberg News. On Tuesday, citing anonymous sources, Bloomberg reported that the Chinese authorities, including the country’s banking sector regulator, have asked major banks and state-owned companies to examine their financial exposure with Fosun closely.

Fosun’s CFO Alex Gong Ping said on Tuesday evening that Bloomberg’s information was “completely false.” “Neither the China Banking and Insurance Regulatory Commission (CBIRC) nor the Shanghai Banking and Insurance Regulatory Commission have asked commercial banks to find out about Fosun’s financial exposure, and those institutions have not received any notice of this,” Gong Ping told the South China Morning Post. The statement was not enough to allay investors' fears.
 
A serial buyer of global assets, Fosun acquired French leisure brand Club Med in 2015, and has a monopoly on the distribution of the BioNTech Covid vaccine in China.

The level of indebtedness of Chinese corporations, particularly those in the real estate sector, is the focus of growing attention. Several construction giants, including Evergrande, have failed to honour their debts, and have been forced into major restructuring. According to Bloomberg, Fosun must repay about $8 billion worth of bonds until 2023.
Last month, Moody's downgraded the group's rating on the basis of low liquidity and a weakening of its portfolio, following several asset sales.


Avec AFP