The Parisian company said Wednesday that it is considering a public listing of its shares on Euronext Paris. It also said its majority shareholder, Shandong Ruyi Technology Group, supports the plan and would remain a majority shareholder post any listing of shares. The listing is subject to market conditions and would allow the company to grow its brands and to “pursue its mission to spread Parisian chic around the world.”
SMCP — its fashion brands include Sandro, Maje and Claudie Pierlot — had considered an IPO in March 2016. In October 2016, private equity firm KKR sold a majority stake to Chinese textiles firm Shandong Ruyi; KKR had acquired its 70 percent stake in 2013. SMCP’s founders and management, as well as KKR, retained a minority interest in the group. Terms of the transaction weren’t disclosed, but the deal was estimated to be around $1.45 billion, including debt. KKR on Wednesday declined comment on whether it was considering a sale of its minority stake in the proposed IPO. If KKR were to choose to do so, it would represent a fairly quick exit following the sale of the controlling stake late last year.
As for timing, a source close to the matter said, “This is a good time for SMCP [to go public]. It has a pretty strong position in its markets, and it is ready for life as a public company. The group is confident it will attract interest from both French and international investors. The momentum is good.”
According to this individual, the purpose of a public offering would be to help the company expand globally to continue its growth.
In an interview with WWD earlier this year, SMCP president and chief executive officer Daniel Lalonde said the group could reach one billion euros in sales by 2019, noting that the company has a “very solid business plan for five years.” The company has been adding omnichannel services in France, such as click and collect, e-reservation and store-to-web, all of which it is now testing in the U.K. and in the U.S.
According to IPO tracking firm Renaissance Capital, global IPO activity in the first quarter saw a 151.8 percent rise in proceeds raised to $24.1 billion, compared with $9.6 billion in the same quarter in 2016. The number of deals totaled 70, with a median deal size of $197 million, compared with 29 deals and a median deal size of $178 million in the comparable 2016 quarter. The IPO tracking firm said the best performing sectors were in consumer, capital goods and technology. Renaissance hasn’t yet disclosed any data connected with second quarter IPO activity.
SMCP has seen consistent year-on-year growth for the past few years, and has almost doubled its total sales in three years. For 2016, the company saw sales grow 16.4 percent to 786 million euros, while profits increased 22 percent to 130 million euros. On a comparable basis, sales were up 7.1 percent, on top of the 11 percent gain in 2015. International sales rose by 24 percent, which represented 54 percent of global sales.
According to data from SMCP, 46 percent of sales are from France; 28 percent from Europe (excluding France), the Middle East and Africa; 14 percent from Asia-Pacific, and 12 percent from the Americas. E-commerce sales grew 80 percent, or 10 percent of total sales. The company, which combines both luxury and fast fashion across key markets, has touch points across 36 countries.
Evelyne Chétrite and Judith Milgrom founded Sandro and Maje in 1984 and 1998, respectively, while Claudie Pierlot started her business in 1984.