The brand that equipped Valencia and lost its founder in the DANA, on the tightrope

ValenciaThe Valencian sportswear brand Luanvi was forced to enter bankruptcy proceedings after accumulating a debt of more than 11 million euros. Its business model, based on purchasing materials from China, was disrupted during the pandemic, as was the loss of its CEO and founder, Vicente Tarancón, in the DANA. The Valencian brand, known for having outfitted several First Division football clubs and basketball teams, is facing its worst crisis since its founding.

Its creation dates back to December 1977, when the three brothers Luis, Antonio, and Vicente Tarancón gave their name to Luanvi. The brand gained popularity after winning the Valencia Club de Fútbol kit in the 1993-1994 season, a relationship that lasted until May 2000, in the Champions League final against Real Madrid at the Stade Saint-Denis in Paris. Its presence in the sports world extended to the Olympics, World Championships, and European Championships, and it sponsored elite soccer, basketball, and handball clubs. In addition, in Valencia, it provided the clothing for the marathon t-shirts held there until the arrival of the new company, New Balance.

In its latest financial statements published last March, the company closed the 2023 financial year with a turnover of €15.5 million, net profit of €61,206, and debt of €11.7 million. In this report, the company attributes its financial difficulties to the outbreak of COVID-19, as well as the invasion of Ukraine and the armed conflict in Gaza. According to the report, geopolitical uncertainties have affected the company through rising interest rates, volatile raw material prices, and imbalances and increases in logistics costs, making its business model unsustainable.

Insolvency problems

In 2023, rising interest rates caused Luanvi's financial expenses to increase by 139% compared to 2022. This time, it hampered its procurement model, which focused on purchasing raw materials from China to reduce supply chain costs. As a result, in 2024, liquidity pressures increased, making payments to suppliers impossible, and payments had to be postponed.

Faced with this crisis, Luanvi decided to restructure its supply chain, dividing its merchandise imports between Morocco and China with the goal of coordinating supply. To complete the company's restructuring, it sought an agreement with banks to gain liquidity and sold its industrial warehouse in Paterna, in l'Horta Nord, for €4.6 million. Approximately half of the proceeds from the sale of the warehouse were used to pay off its debt, although it was unsuccessful in reaching an agreement with the financial institutions.

The death of Vicente Tarancón

The DANA tragedy was the final blow to the company's instability, which had to face the death of its CEO and one of its founders, Vicente TarancónTo give him a legacy, at the end of January, the brand's power passed into the hands of his son, Javier Tarancón, who would then become CEO.

Withdrawal as sponsor

Although Luanvi has been representing football teams such as Levante, Villarreal and Valencia CF for years, and is one of the most important brands in Valencian basketball, it has lost a lot of support in the last year due to its financial situation.

In May, the Valencian basketball team announced that, after almost three decades of wearing Luanvi sportswear, the new season orange will not bring its logo. Similarly, the long-awaited grand opening at the new Roig Arena in Valencia will also take place without the presence of its brand. In the football world, the Valencian Football Federation has also ended its collaboration with the Valencian sports brand, which had been one of the sponsors of the competitions organized by the Federation for the last two seasons.

Although the name was changed to Textil Deportivo Valencia SA to reinvent itself and avoid bankruptcy, with the intention of creating a different corporate image, these attempts have not been sufficient, and it will now have to face another stage in the company's history.