A Sandro store on Hong Kong's Fashion Walk.

PARIS  SMCP, parent of the Sandro, Maje and Claudie Pierlot fashion chains, said sales grew 16.4 percent in 2016 as it continued its global expansion under its new owner, China’s Shandong Ruyi Group.

Revenues totaled 786 million euros, or $870 million, last year and based on growth trends, the group could break through the 1 billion euros, or $1.1 billion, barrier in sales by 2019, SMCP president and chief executive officer Daniel Lalonde told WWD.

Earnings before interest, taxes, depreciation and amortization grew 22 percent to 130 million euros, or $144 million. Growth was slower than in 2015, when the group’s revenues rose 33 percent and EBITDA jumped 44 percent. Sales in 2016 were up 7.1 percent in comparable terms, compared with a rise of 11 percent the previous year, it added.

“In relative terms, it was a very good year, and it was still a good year in our terms as well, coming off a very strong 2015,” said Lalonde. “We have a very solid business plan for five years, and we overachieved it last year.”

The executive credited strong collections for all three brands, in addition to balanced growth in every region. Sales in its key domestic market were up 9 percent despite a drop in tourism in the wake of a series of terrorist attacks and a general decline in sales of women’s ready-to-wear.

French women spent 10.4 billion euros, or $15.5 billion, on clothing last year, down 2.6 percent in value terms compared with 2015, according to the French Federation of Women’s Ready-to-Wear.

“France continues to gain market share in a declining market,” said Lalonde, noting that SMCP renovated between 30 and 40 key stores and added omnichannel services in France such as click and collect, e-reservation and store-to-web, which it is also testing in the United Kingdom and United States.

Revenues were up 45 percent in Asia, 20 percent in Europe, excluding France, and 13 percent in the Americas.

Lalonde was cautiously optimistic for the year ahead, noting the group has almost doubled revenues in the last three years as it fulfills its mission of spreading Parisian chic around the world. In 2017, it aims to confirm its position as a global leader in the accessible luxury market.

“We still see lots of potential for growth. We’re being very careful and selective on where we invest,” he said, pointing to geopolitical risks in Europe and elsewhere, as well as the recent spate of retail closures and department store cutbacks in the U.S.

“That’s something that I’m mindful of, as well, as we keep developing and growing our brand, because the U.S. is a strategic market for us,” he said.

Shandong Ruyi, which finalized its purchase of a controlling interest in SMCP in October, has said it plans to ramp up global expansion of the French brands, particularly in Asia.

SMCP expects to open between 100 and 125 points of sale in 2017, after adding 105 last year in locations including Hong Kong’s Fashion Walk, Yorkdale mall in Toronto, Via Frattina in Rome and Via Roma in Florence.

The interior of a Maje store on Hong Kong's Fashion Walk.

The interior of a Maje store on Hong Kong’s Fashion Walk.  Gareth Jones

Lalonde said the group ended the year with 67 stores in Mainland China for all three brands combined, indicating there is still room for growth. It also plans to extend its e-commerce reach in China with the launch of branded web sites for Sandro and Maje this year.

In 2016, SMCP launched dedicated web sites for Sandro and Maje on Alibaba’s Tmall.com platform, and these will be followed by similar stores for Sandro Homme and Claudie Pierlot this year.

“Tmall obviously is the big traffic driver in China, so I think it will be for some time a larger platform, but we think it’s important for the brand image and also for our customer experience to have our own e-commerce presence in that market,” said Lalonde.

“It’s very much part of the fabric of our company and our strategy to become leaders in digital. We’ve been playing a little bit of catch-up over the last years, and now we’re, I think, at a point where we can innovate,” he added.

Online sales accounted for 10 percent of the group’s sales last year, up from 6.2 percent in 2015. SMCP deepened its relationships with partners, adding online sales through De Bijenkorf in the Netherlands and Breuninger in Germany, and now offers e-commerce in most of the countries where it is present.

The group operated 1,223 points of sale of 36 countries at the end of 2016.

SMCP is also working on expanding its offering of accessories, which saw revenues climb 41 percent in 2016, fueled by the success of Maje’s M bag. It has signed an agreement with Mondottica to produce eyewear for Sandro and Maje that will hit stores next year.

Sandro's new Lou bag.

Sandro’s new Lou bag.  Courtesy

Related stories:

SMCP Group Steps Into Eyewear

SMCP Brings ‘Parisian Chic’ to the World

Shandong Ruyi Completes Acquisition of Sandro, Maje Group

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