SMCP doubles net income in 2022, results driven by Europe, North America

The SMCP fashion group (owner of Sandro, Maje, Claudie Pierlot and Fursac) doubled its net profit in 2022, driven by buoyant sales in Europe and North America, while China was still affected by the crisis caused by the pandemic.

The group’s net profit in January-December 2022 amounted to €51 million, while revenue grew by 16.1% to €1.2 billion, according to a press release published on Thursday before the opening of the Paris Stock Exchange.

“The Group has recorded another very good performance this year, with sales growth in all regions except for Continental China due to Covid-related constraints,” said Isabelle Guichot, CEO of SMCP, quoted in the press release. “The work we have been doing for several years on the desirability of our brands has enabled us to adjust our retail prices in line with inflation, while continuing to deploy our full-price strategy. We have thus been able to maintain a solid level of profitability, allowing us to double our net profit compared to the previous year. We also made major progress in our ESG strategy, accelerating our transparency and circular economy initiatives, improving our CDP rating, and announcing the launch of our SMCP Retail Lab training school. Finally, we opened new shops in key areas, notably in China, in anticipation of the business recovery,” added Guichot.

All of the group’s labels are growing: Sandro recorded sales worth €582 million (up by 16.9%), Maje’s were worth €467 million (up 14.8%), while Claudie Pierlot and Fursac combined reported sales for €156 million (up by 17%).

By geographical area, France accounted for a revenue of €414 million, up 21.3%, thanks to a “very strong increase” in sales chiefly in physical retail, whose results exceeded those of 2019, while online sales remained stable year-on-year. However, growth decelerated in the last quarter (comp sales increased by 9% to €120 million), mainly because Q4 2021 was a high comparison basis.

The rest of Europe and the Middle East generated a revenue of €377 million (up 32.2%), the Americas region (USA, Canada, and Mexico) a revenue of €184 million (up 29.3%), driven also by a strong dollar (organic growth was equivalent to 16%).

Sales in Asia-Pacific instead slumped by 14.4%, falling to €231 million. In mainland China, business was heavily affected by Covid restrictions, which resulted in the closure of shops and warehouses and a drop in footfall in H1 2022. Then “the fourth quarter was strongly penalized by a spike in positive cases, following the lifting of anti-Covid restrictions,” said SMCP. However, the group noted that outside China, Australia’s stores were all fully operational. In South Korea, Singapore, and Malaysia, thanks to tourism, the business is expanding.

In Q4 2022, the group’s organic sales grew by 4% to €332 million.

The good news for SMCP is that this positive performance is enabling the group to continue to deleverage. Its net financial debt/EBITDA ratio fell from 2.5 as of December 31, 2021 to 1.9 as of December 31, 2022.

For 2023, SMCP expects “a mid- to high-single digit sales growth.”

In addition, the board of directors “welcomed” Wednesday's announcement of the upcoming sale of the 37% stake held by Shandong Ruyi in the group, in order to repay the Chinese group’s creditors after it defaulted on its debt. This will enable SMCP to “regain a stable shareholding structure.”

With AFP