SMCP Sets 2021 Guidance as Q3 Revenues Rise 8.4%
PARIS — SMCP, the parent company of the Sandro, Maje, Claudie Pierlot and De Fursac accessible luxury labels, said on Wednesday it is confident in its ability to reach sales of 1 billion euros despite a slowdown in sales growth in the third quarter.
Revenues rose 8.4 percent year-over-year on an organic basis to 271.7 million euros in the three months to Sept. 30, compared with a jump of 61.1 percent in the prior quarter, the group reported. But its performance continued to improve in comparison with 2019, considered a more reliable benchmark due to the disruptions caused by the coronavirus pandemic last year.
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Compared with the same period in 2019, sales were down 3.2 percent at constant exchange rates, versus a decline of 14 percent in the second quarter.
SMCP reported a “positive dynamic” across all its markets in the first weeks of October, with strong sales in mainland China, a solid U.S. performance and a good trend in Europe. It confirmed the mid-term guidance presented during its investor day in October 2020.
Isabelle Guichot, who took over as chief executive officer in August, did not address the ongoing issue of the bond default by its majority shareholder, European TopSoho, a Luxembourg-based subsidiary of ailing Chinese apparel company Shandong Ruyi Group, which could see SMCP fall into the hands of creditors.
SMCP has stated repeatedly that the situation does not affect its own financings and operations.
“We delivered a solid performance in [the third quarter] allowing us to post sales close to their pre-pandemic level of 2019,” Guichot said in a statement.
“We are particularly pleased with our sales trend in the U.S., which continues to outperform thanks to strong demand. In mainland China, sales recorded double-digit growth versus 2019 despite the resurgence of COVID-19 cases locally. Sales in France and EMEA are also approaching their pre-crisis level, despite reduced tourism,” she added.
In mainland China, organic sales were up 15.8 percent versus two years ago, while in the APAC region as a whole, they rose 7.3 percent. In the Americas, sales turned positive versus 2019 for the first time since the beginning of the pandemic, gaining 10.4 percent, with the U.S. posting 15.2 percent growth.
In France, SMCP’s home market, revenues fell 10.4 percent on an organic basis, significantly better than the 28 percent drop recorded in the previous quarter. In the EMEA region, sales were down 8.6 percent.
SMCP said it continued to progress with its One Journey strategic plan, which involves brand initiatives to engage Millennials and implementing ship-from-store across Europe. It is also rationalizing its store portfolio, and has closed 38 points of sale in the first nine months of the year, including 45 net closures in France. It continued to expand in Asia Pacific, meanwhile, opening 19 new doors, mainly in China.
Digital sales have stabilized at 24 percent of revenues in the first nine months of the year as the company has reopened its physical stores and reduced markdowns.
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SMCP’s Controlling Shareholder Defaults on Bonds
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