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French firm SMCP's sales at $307.2 mn in Q1 FY24

27 Apr '24

2 min read

French firm SMCP's sales at $307.2 mn in Q1 FY24

Pic: JHVEPhoto - stock.adobe.com

Insights

French fashion company SMCP reported a 5 per cent decrease in Q1 FY24 sales, totalling €287 million (~$307.2 million), amid challenging market conditions, particularly in China.
The company plans to close 100 stores mainly in China and aims for a 10-12 per cent EBIT margin by 2026.
Efforts to enhance efficiency include leveraging technology.

SMCP, a French luxury fashion group, has reported a 5 per cent decline in organic sales for the first quarter of fiscal 2024 (Q1 FY24), totalling €287 million (approximately $307.2 million). This downturn is attributed to challenging comparisons from the previous year. Despite the overall dip, the company highlighted its robust performance in America and resilience across European markets, excluding France. However, weakened consumer spending in China dampened the overall results.

The brands under SMCP, namely Sandro and Maje, experienced slight organic growth when excluding the Chinese market. This growth was supported by a stringent discount rate policy, which saw a 2 per cent improvement in the in-season discount rate, primarily across Europe and North America.

In its ongoing efforts to streamline operations, SMCP reported the closure of 11 stores, mainly in Asia, bringing its global points of sale to 1,719, the company said in a press release.

Looking ahead, SMCP has outlined a mid-term action plan with four key priorities aimed at steering the company back to profitable growth and increasing market share from 2026, following an optimisation of its network. These priorities include achieving a mid-single digit sales compound annual growth rate (CAGR) and aiming for an EBIT margin of approximately 10 per cent in 2026, with hopes to increase this to around 12 per cent within five years.

Furthermore, the company plans to rebalance its geographical footprint by closing around 100 underperforming stores, predominantly in China, over the next two years. This will be coupled with an acceleration in wholesale expansion through partnerships.

SMCP is also looking to enhance its operational agility and leverage technological innovations to boost efficiency and profitability. This includes strengthening its negotiating power over expenses and rolling out an action plan from 2024, expected to add €25 million to its EBIT by 2026.

Fibre2Fashion News Desk (DP)

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