SMCP Details Turnaround Plan As Q1 Sales Fall 5.8%

PARIS – SMCP, the owner of contemporary labels Sandro, Maje and Claudie Pierlot, has reported a 5.8 percent decline in its reported sales for the first quarter of 2024, with France and Asia, especially China, weighing on numbers.

Revenues for the three months to March 31 totaled 286.8 million euros, representing a drop of 5 percent on an organic basis. The Sandro and Maje brands both saw slight organic growth when factoring Chinese business out of the numbers, the company said.

“As anticipated, our first quarter remained on a similar trend to that seen in the second half of 2023,” chief executive officer Isabelle Guichot said in a statement.

Domestic sales fell 7.4 percent on an organic basis to 98.2 million euros, weighed down by consumers reining in spending. In Asia-Pacific, sales were down 15.7 percent to 57.3 million euros.

Business in the U.S., Canada and Mexico was buoyant – sales for the region were up 8.9 percent organically to 42 million euros. In EMEA outside France, revenues totaled 89.4 million euros, which was roughly flat.

“We are satisfied with our performance in the United States and our resilience in Europe, except in France, where consumer spending remains volatile. In Asia, our business continues to be affected in China by low in-store traffic, while our sales are dynamic in South-East Asia,” said Guichot.

The company said its network optimization continued in the quarter, with 11 net store closures, and that it has reduced its rate of discounting, mainly in Europe and North America, a move seen as key to bringing the business back on track.

As announced with its 2023 numbers in February, SMCP revealed more details of the turnaround plans it hopes will help it return to profitable growth and market-share gains by 2026. “Over the coming months we expect to fully benefit from our global geographic footprint and accelerating performance in high-potential regions,” said Guichot.

Plans to streamline the store network include the closure of 100 stores over the next two years, mainly in China. The company plans to accelerate expansion in wholesale through a partnership model, meanwhile.

It also hopes to generate efficiency gains by becoming more agile and leveraging technology, it said.

From 2026 onwards, once the plan is fully implemented, SMCP hopes to return to mid-single digit sales increases at a compound annual growth rate and an EBIT margin of 10 percent, it said.

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