SMCP Flags Ongoing Strength in China as Crisis Weighs Elsewhere
PARIS — SMCP, the group behind contemporary French labels Sandro, Maje, Claudie Pierlot and De Fursac, continues to perform strongly in China, even as the coronavirus crisis weighs on its performance elsewhere in the world, notably in Europe and North America, the company said Wednesday.
“China and Asia is continuing on an incredible trend,” said chief executive officer Daniel Lalonde, noting second half sales in China grew at a pace of nearly 25 percent.
Business will likely continue to be challenging elsewhere in the first half of this year, he noted, adding that he is optimistic that a recovery could start shaping up this summer, depending on vaccination rates.
The group reported annual adjusted earnings before interest, tax, demortization and amortization of 179.6 million euros, a 37.3 percent decline, as discounts reduced gross margins by 3.8 points. In January, SMCP said annual sales were down 22.9 percent to 873 million euros, hit by coronavirus lockdowns in key regions across Europe and North America.
The group pushed further into e-commerce, with online sales growth hitting nearly 30 percent for the year.
SMCP, which has expanded its retail network abroad rapidly in recent years, has begun focusing more on organic sales, improving the performance of its stores and beefing up its omnichannel services.
Cost savings have been a focus since the crisis hit, and inventories were down 10 percent compared to the previous year, thanks to tight management, Lalonde. said
Plans are to continue investing in both retail expansion and digital marketing in Mainland China.
“We’re basically investing on all levers, I’d say, in that part of the world,” said Lalonde. The group has been active on Tmall, holding events every month, as well as working with social media and celebrities in China, and recently entered the realm of gamification, around a month ago. Consumers can dress avatars of themselves with styles from Sandro and Maje — and then buy the clothing in real life.
Other international fashion retailers have stumbled in China, and some are pulling back.
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