SMCP Sales Down 9.5 Percent
● The group plans to focus on organic growth and is doubling marketing investments next year.
PARIS — SMCP, the group behind accessible luxury labels Sandro, Maje, Claudie Pierlot and De Fursac, reported a 9.5 percent decline in third-quarter sales as business improved across all regions, with continued growth in Asia.
“I am particularly satisfied with our figures in Mainland China, which is undoubtedly a key driver of our future growth,” said SMCP chief executive officer Daniel Lalonde. The executive noted that the quarterly performance was “encouraging,” but remained cautious about the upcoming quarters, citing the uncertainty cast by the resurgence in the coronavirus in much of the world.
On a call with journalists, the executive discussed the group’s future plans, adding details to a strategy outlined in an interview with WWD over the summer, and including specific environmental goals.
With an eye to meeting changed consumption habits, the group is emphasizing organic growth over its flag-planting retail expansion of the past, reining back the pace of store network growth to between 35 and 50 new points of sale annually, with a focus on Asia. The company is closing its fleet of multibrand stores in France, called Suite 341, and will count a total of 20 net openings globally this year. That figure compares with around 80 new stores in recent years.
In Asia, which is expected to account for 50 percent of the group’s growth by 2025, the group will continue to add stores to new cities, while investing in digital marketing, noted the executive, stressing the importance of drumming up interest with Chinese consumers through special activities. As the group focuses on organic growth, it will seek to build interest in its brands through marketing and plans are to double such investments starting next year.
Sales over the third quarter were down 10.6 percent on an organic basis to 248.4 million euros, helped by growth in Asia and domestic demand, which helped partially offset the absence of tourists in France. Sales in France, the largest market, were down 8.3 percent on an organic basis, while sales to the rest of Europe and the Middle East declined 20.6 percent.
The Americas was the worst-performing region, down 32.2 percent.
SMCP targets sales growth of more than 10 percent at constant currency rates in 2023 compared to 2019 with an adjusted margin on earnings before interest and tax of around 10.5 percent in 2023. The group is also aiming for digital sales to account for a quarter of business by 2025.
Ecological goals the company is seeking to reach by 2025 include using only ethical suppliers, raising the level of sustainable materials and products from the current level of 27 percent to more than 60 percent and reducing carbon emission by 20 percent.