SMCP pledges to "reignite growth" after profits hit in 2023

SMCP, parent of Sandro, Male, Claudie Pierlot and Fursac, has said it will reveal a plan to "reignite growth and gain market shares" after a 2023, which saw sales grow but profits drop.

The French contemporary fashion group reported sales up +4% at constant exchange rates to €1.2bn for the year but said net profits had slumped to €11m, excluding one-off items, versus €51m in the prior year.

However the group has said it had experienced adjusted EBIT improvement in the second half of the year to reach €79.5m (6.5% of sales) across the full-year. It had also witnessed an improvement of cash generation in H2 (€23m) and achieved a net debt reduction versus 2022.

SMCP said growth in China for the year had been lower than expected while the Americas had shows "good resilience, with a sequential improvement of the second half". "Europe, and France in particular, impacted by the slowdown in demand, which progressively intensified throughout the year," it added.

Sales in its home market of France were broadly flat at €413 million, while across the rest of EMEA its annual sales rose 3.1% on a reported basis hitting €388.8 million. The UK had been hit by a lower level of tourism, it said.

During the year the group opened 47 new stores to take its total global points of sale to 1,730.

At a brand level, sales at Sandro were up 3.3% at €601.4 million, Maje was down 1.1% at €462.5 million, while Claudie Pierlot and Fursac, were up 6.5% at €166.6 million.

To keep the business moving forward the group said it will unveil a mid-term plan for 2024 to:

– Reignite growth and gain market shares
– Mitigate risk across geographies
– Improve efficiency
– Protect profit, cash and liquidity

“We will particularly intensify our efforts to enhance the desirability of our brands and in digital, optimise our store network across various regions and deeper delve into cost management, while maintaining our focus on profitability and cash generation. We expect to see the first benefits of this plan by 2024, with further acceleration from 2025 onwards" said CEO Isabelle Guichot.