SMCP posts sales recovery over Q2, plans to grow China business

SMCP In the third quarter of 2020, consolidated sales at SMCP, parent company of Sadro, Maje, Claudie Pierlot reached 248.4 million euros, down 10.6 percent on an organic basis. Reported sales were down 9.5 percent, including a negative currency impact of 1 percent mostly in Americas and APAC, while De Fursac’s contributed positively at 2 percent. SMCP managed to partially offset the impact of the crisis through a strong performance in e-commerce of 27.6 percent of sales growth. In its investor day presentation, the company said that it plans for more than 10 percent sales growth at constant currency in 2023 compared to 2019, sales CAGR above 6 percent at constant currency between 2023 and 2025, adjusted ebit margin of 10.5 percent in 2023 and more than 12 percent in 2025.

Commenting on the report and future plan, Daniel Lalonde, SMCP’s CEO, stated in a statement: “We are currently operating in a challenging and constantly evolving environment. The market trends that we have been observing for several months, including the rising demand from Chinese customers and new generations, the shift to online shopping with a phy-gital mindset, as well as a heightened environmental and social conscious, have accelerated sharply with the Covid-19 pandemic. With this plan, we aim to grow our exposure to Asia which will become our first region in 2025, while our digital sales are expected to reach 25% of our total sales in 2025.”

SMCP reports positive growth in APAC driven by mainland China

In France, the company’s sales were down 8.3 percent on an organic basis, showing a strong sales improvement versus Q2 2020. Over the quarter, the group pursued its optimization plan with four net additional closures. In Europe, sales were down 20.6 percent on an organic basis. The company added that while Germany, Northern Europe and Russia, showed good resilience, Italy, the UK and Spain remained the most impacted markets. Over the quarter, SMCP recorded one net closure due to five closures in Switzerland linked to the footprint’s reduction of a department store.

In the Americas, sales were down 32.2 percent on an organic basis. North America remained the most affected region by the heath crisis as SMCP is mainly positioned in the area of New York, Florida and California which have been the most impacted. In APAC, sales were up 13.8 percent on an organic basis mainly driven by mainland China, up 29.6 percent of organic growth including a double-digit like-for-like sales growth. In the rest of Asia, SMCP recorded contrasted trends with strong growth in South Korea and Taiwan while in Hong-Kong, Macau, and Singapore, market conditions improved but remained challenging.

Over the last twelve months, SMCP net openings amounted to 38 directly operated stores of which six net openings in Q3 2020. This includes 20 net openings in APAC, 17 in EMEA and 11 in Americas. Meanwhile, the Group has pursued the optimization of its network in France with 10 DOS closures. SMCP aims to open 20 new store in 2020 and 30 to 50 DOS per year between 2021 ro 2025.

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