French fashion group SMCP swings to first-half loss

SMCP, the parent company of Parisian labels Sandro, Maje, Claudie Pierlot and De Fursac, has swung to a loss in the first half of the year due to Covid-19, but says it has implemented a number of cost-cutting measures to ride out the pandemic.

The French premium fashion group reported a loss of 88.5 million euros, compared to a profit of 17.2 million pounds a year earlier. The company said that figure included a 42.6 million goodwill impairment relating to its most recently acquired brands, Claudie Pierlot and De Fursac.

Sales at the company fell 31 percent on a reported basis to 372.8 million euros. Its sales in Mainland China “continued to gradually improve” throughout the first half of the year, returning to sales growth in June.

EBITDA was down from 141 million euros in the first half of 2019 to 55.1 million euros in the first half of 2020.

Solid cash position

“Our results were strongly impacted by the Covid-19 pandemic. Nevertheless, we have implemented strong measures to mitigate the impacts of the crisis, reducing operational costs and investments, securing cash position and adjusting collections,” SMCP CEO Daniel Lalonde commented on the report.

“The group is well equipped to face this challenging period as its fundamentals remain solid: we benefit from a geographically well-balanced portfolio of international brands, a strong position in e-commerce and an agile organization.”

The company added that the “solid execution” of its Covid-19 action plan saw it cut costs of 60 million euros, and it now has a cash position of 219 million euros as of 30 June.

Lalonde continued: “In H2, we will further pursue our Covid-19 action plan while continuing to deliver on our key priorities: enhance brands desirability, create one unified channel between e-commerce and physical stores to build a seamless and innovative experience for customers, and accelerate sustainable fashion. We will detail all of these actions during our Strategic update on 27 October.”

Photo credit: Sandro Paris