SMCP Set to Expand Into India
PARIS — French accessible luxury player SMCP is set to enter India through a partnership with Reliance Brands Ltd.
SMCP is parent company to women’s labels Sandro, Maje and Claudie Pierlot and men’s label Fursac. The partnership will see the first Sandro and Maje stores open in India in 2024, the French group said Thursday.
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The stores are slated to open in the second half of the year at the Jio World Plaza shopping mall in Mumbai.
The group plans to open an average of three additional stores a year over the next two years, with the goal to open up to 10 units in the country by 2027. Key target markets after Mumbai will be Delhi, Bangalore and Kolkata.
“Those are the cities where you find the proper retail environment and the commercial level of retail,” SMCP chief executive officer Isabelle Guichot told WWD. “The commercial level of retail is now really developing in India and that allows for the proper brand portfolio and environment.”
SMCP had explored expansion into the country before COVID-19 and felt now was the right time to move as the country’s retail landscape has evolved and several luxury players have entered the market. India also has a potent mix of new money and demographics, Guichet said, noting the growing segment of high net worth individuals in the country, alongside upwards of 116 million eager Gen Z shoppers.
Feedback from young Indian consumers that shop in the Middle East and the U.K. helped the company “see that appetite, which really confirmed our willingness to enter the country.”
The company hopes to make inroads with that young shopper who is interested in exploring the story of French style. “It’s quite relevant for us to be a pioneering element in that segment in India,” she said. “It’s an obvious untapped opportunity for us.”
Sandro and Maje will be the first two brands making strides as the company finds its footing in the market. “Then let’s see with Claudie Pierlot and Fursac how we can maneuver once we get a little more experience in the market with Reliance,” she said.
The partnership with Reliance and their experience with luxury brands was also a key deciding factor.
RBL is the country’s largest retailer in the luxury to premium sector and has been riding the wave of expansions into the subcontinent through partnerships with high-end houses including Giorgio Armani, Balenciaga, Bottega Veneta, Valentino, Versace and more.
The Reliance conglomerate is an industrial giant that ranges from oil and gas to telecoms, media, textiles and retail. It operates more than 900 brand stores and retail concessions throughout India.
The expansion into India is continuing SMCP’s growth strategy after 46 net openings in the third quarter. The group operates more than 1,600 stores worldwide across its four labels.
SCMP is entering India at a time when it is remixing its strategy elsewhere in Asia. In China, where the company faced a slower-than-expected recovery, it is looking at opening stores on the Hainan peninsula in the south of the country as domestic tourism heats up.
“It’s a constant moving environment we will absolutely maintain and make the best of our network in China to make sure that we have the best presentation and retail execution in that country,” the CEO said.
The company will continue its strategy by enlarging or optimizing stores throughout its existing network in first- and second-tier cities, “rather than enlarging the number of cities,” she said, however noting there “may be one or two openings” in the near future.
Guichet said the dynamic in China has changed as those shoppers are moving around more within the region and heading less to far-flung locales abroad, such as Europe.
“The Chinese consumer is a very important target for us, but we have to deal with it differently — more locally, both in brick-and-mortar and digital. We have a bit of a different conversation with the Chinese client now but still very important,” Guichet said.
In Europe, a new mix of local tourism has also increased. SCMP is looking to its home country of France, which will host the Olympics next year, for another new injection in Paris, as well as cities like Lille and Marseille where some events will be held. The company is mapping that strategy out. “We are really scrutinizing very closely the program and what will be the flow,” she said.
Elsewhere, the Americas are “normalizing” after a pointed drop in Chinese tourists heading to Canada. The company is continuing its expansion in the U.S. with two openings in New York City’s Meatpacking District slated for mid-December, and an opening in Scottsdale, Ariz., in the first quarter of next year.
SMCP’s continuing concentration on developing its omnichannel strategy is being adapted to the different markets, with a focus on integration and streamlining logistics. “The technology and infrastructure behind it are really for us a key to our retail development,” she said. “Globally, we are making sure our omnichannel capacity and capabilities from reservations, ship from the store, [and] to resale, circular economy are developing.”
That development brings in a bit of a different client mix, as the company concentrates on its post-pandemic full-price strategy. Digital channels “sometimes attract people more eager to look for nice prices,” but that is shifting. For example, the Maje “Miss M” bag launched in September sold out quickly, Guichet said, and customers were able to use the digital services to reserve and place a deposit for the next drop.
November “was a big month in digital,” Guichet said, adding that China’s Singles’ Day was strong, as well as Black Friday kicking off the holiday season elsewhere in the world.
The company continues to be “watching very carefully what happens” with macroeconomic and political conditions shifting quickly worldwide. “It’s something that has an impact on consumer behavior, but we’re looking at what’s going on and we’re preparing [for] the last month of the year with the utmost care and attention.”
Guichet said the company’s corporate social responsibility is a main pillar and “key to each and every move that we do…there will be no U-turn,” she said. One move is that the company is shifting away from using oil-based virgin polyester to recycled materials, as well as using more natural fibers. “It’s very important that we keep in mind that it’s no longer an option, it’s something that is part of our business model and that is to be conveyed properly to the client,” she said.
The Gen Z shoppers are particularly keen on this information before making purchasing decisions, she said, and are aided by the inclusion of QR codes that have traceability information available. Guichet said about 70 percent of the company’s stock keeping units now carry the QR codes on hangtags.
The French company has seen a slowdown in consumer spending in key markets in Europe and the Americas, as well as a slower-than-expected recovery in China, dampening its growth in the third quarter.
In the most recent financial results released in October, the company reported sales fell 1 percent at constant exchange to 295 million euros during the three-month period, while it seeks to implement a cost-cutting and full-price sales strategy to boost its numbers.
India’s apparel sector is set to grow about 3.6 percent per year through 2027. The market reached $101 billion in 2023, with the market value of women’s apparel estimated at $49 billion.
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