PARIS — SMCP, the group behind contemporary French fashion labels Sandro, Maje and Claudie Pierlot, posted a drop in first-half profits after refinancing its debt, and said it’s sticking with full-year targets.
The company also cleared a regulatory hurdle for its purchase of men’s brand De Fursac.
Group share of net income for the six months ended June 30 was down 26.8 percent to 20 million euros following a refinancing of debt, which cost 12.6 million euros. The effort will result in a more visible reduction in financial charges from next year, the company noted.
Sales for the first half rose 9.5 percent to 540 million euros, fueled by swift growth in China, where SMCP is expanding its store network. On a like-for-like basis, however, the figure was down 0.7 percent, weighed down by a lackluster demand in its home market, France.
First-half results were in line with the company’s expectations, chief executive officer Daniel Lalonde said in a statement.
“Despite challenging market conditions, SMCP’s business model once again demonstrated its resilience,” Lalonde said. He attributed the company’s focus on full-price selling as helping the group maintain margins: Adjusted EBITDA margin stood at 16.1 percent over the period.
The closing of the purchase of De Fursac is expected to take place quickly, noted the company, following a clearance from the French competition authority.
Announced in June, the acquisition is the first major transaction by the French group since it was listed on the Paris stock market in 2017.
Controlled by Chinese textile conglomerate Shandong Ruyi Group, SMCP has been expanding its labels in China, as well as the U.S. and Mexico.
SMCP plans to take the De Fursac, which is known for its modern, tailored silhouettes, from a level of around 40 million euros in annual sales to over the 100 million euro mark in the near term by expanding the label abroad, leaning on the group’s e-commerce expertise and adding new categories — notably shoes and accessories, as well as more casual looks.
The group targets sales growth of between 9 percent and 11 percent at constant currencies this year and a stable adjusted EBITDA margin compared to 2018.