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- St. John Knits Pushes Deep Discounts Amid Luxury Market Headwinds: The brand, part of Lanvin Group, has leaned heavily on 40 percent to 60 percent off promotions to drive sales, raising questions about long-term impacts on its luxury image.
- Revenue Drops but Profitability Improves: Despite a 12 percent revenue decline in 2024, St. John Knits swung to a $9.1M profit, thanks to improved margins from full-price selling and production cost reductions.
- Leadership and Wholesale Strategy Key to Future Growth: With new executives and a revamped wholesale model through Nordstrom, St. John is aiming to balance elevated brand positioning with necessary retail agility to remain competitive.
Blaring promotions to clients of St. John Knits in the past few weeks offered 60 percent off a number of pieces.
First it was Fall 2024 in what was dubbed an online sale. Then it was suiting separates, dresses, evening gowns and Resort 2025.
If St. John Knits was a bright spot for parent Lanvin Group last year, it seems part of the strategy may have been around promotions to nudge sales. However, how long can such tactics work and what is the long-term impact to brand equity?
Lanvin Group released final results for 2024 on Wednesday after offering an unaudited preview of its financial performance in February.
Lanvin’s portfolio also includes its namesake brand, in addition to Wolford, Sergio Rossi and Caruso.
The numbers didn’t change from that initial release.
Revenue for Anaheim-based St. John Knits fell 12 percent to 79 million euros, or $89.5 million at current exchange rates.
Meanwhile, margin improved for the brand from 63 percent to 69 percent last year, which the company attributed to more full-price selling and a decline in the cost to produce.
That came amid a challenging landscape for luxury, Lanvin Group Executive President and CFO David Chan said in an earnings call Wednesday.
“2024 was defined by macroeconomic turbulence, shifting consumer behaviors and industrywide softness,” Chan said. “Yet, within these challenges, we achieved critical milestones that position us for recovery.”
Chan touted St. John’s profitability of 8 million euros ($9.1 million), swinging back into the black after a 2020 loss dragged on the overall group.
Next Moves?
Key for St. John is its Chief Commercial Officer Mandy West and Chief Merchandising Officer Lauren Parrish, who joined the company earlier this year.
St. John will look to the two new hires to continue on the work that was done last year to improve the business.
Part of that work was a retooling of operations in North America, improvements to St. John Knits’ Beverly Hills and New York stores and what Lanvin Group Executive President Andy Lew said was a “new wholesale model” developed with Nordstrom.
He didn’t elaborate on the specifics of that model, but a current look at St. John’s landing page at Nordstrom.com shows a number of suiting separates at 40 percent off.
Markdowns, while nothing new at retail, is typically done in the off-price channel and away from a brand’s image in full-price boutiques. Screaming “60 percent off” isn’t exactly the best look for a brand that pegs itself as luxury.
That the company said full-price sell-through is contributing to St. John’s comeback makes it all the more puzzling why so much is on promotion for such extended periods of time. A long-term question is whether St. John’s consumer comes back to the label when it removes the sale tags – if that is the target goal – or if it’s training a new generation of clientele to buy at a faster clip by moving inventory through discounting.
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