PARIS (Reuters) - Chinese conglomerate Fosun (HK:0656) is set to acquire a majority stake in France's oldest surviving couture label Lanvin, as the fashion house faces a cash crunch following a slump in sales, sources close to the matter said on Monday.
Fosun, which owns French leisure group Club Med and a stake in Italy luxury menswear firm Caruso, had been vying with Qatari investment fund Mayhoola, the owner of Italy's Valentino, for control of Lanvin, two sources had previously said.
"It was close, but Fosun finally got it, one of the sources said, confirming an earlier report by industry news site Fashion Network.
Another said Fosun was the highest bidder.
Fosun and Lanvin could not immediately be reached for comment.
Lanvin, founded in 1889 and which has long been associated with Parisian chic, has hit a rough patch after the surprise departure in 2015 of star designer Alber Elbaz, who had revived the storied label.
Sales have since slumped and Lanvin, which is 75 percent controlled by Taiwan-based media magnate Shaw-Lan Wang, had been facing a cash shortage, sources had previously told Reuters.
The fashion house had said in early November that Wang would inject more money into the company, but by December Lanvin said it was looking at other industrial and financial solutions that did not involve a capital increase.
Fosun would invest more than 100 million euros (£89 million) in Lanvin as part of the deal, industry news site Fashion Network reported on Monday, citing a source with knowledge of the transaction. Wang would retain a minority stake in the business.
Lanvin does not publish earnings. It made an 18.3 million euro loss in 2016, sources with knowledge of the situation had previously told Reuters. Losses had been forecast to deepen to at least 27 million euros in 2017 as sales continued to fall, they said.
Lanvin has twice changed artistic director since Elbaz's departure, but the appointments have yet to revive sales.
Chinese interest in European fashion labels has been on the rise. A Lanvin purchase by Fosun would follow recent acquisitions by conglomerate Shandong Ruyi (SZ:002193), which on Friday agreed to buy a controlling stake in Swiss luxury shoe and accessories firm Bally.
Shandong Ruyi already owns stiletto-heels maker Jimmy Choo.