PARIS — SMCP, the owner of Maje, Sandro and Claudie Pierlot, posted a 14.8 percent rise in first-half operating income and confirmed full-year targets as business remains brisk for its contemporary fashion lines, particularly in Asia.
Adjusted EBITDA, or operating income, totaled 83.9 million euros for the period, with the company flagging e-commerce as one of the reasons for improving margins. Adjusted EBITDA margin increased from 16.7 percent to 17 percent.
“This achievement underlines the effectiveness of our strategy to generate profitable growth through the dynamic expansion of our core business, the success of our e-commerce approach and new store openings in highly attractive locations,” chief executive officer Daniel Lalonde said in a statement.
“The main drivers were a positive mix supported by e-commerce and digital as well as better absorption of fixed costs,” analysts at Exane BNP Paribas said in a research note. Net profit amounted to 27.4 million euros, beating consensus estimates by 10 percent, they added.
Sales were up 15.5 percent in constant currencies to 493.3 million euros in the first half, as previously reported. On a like-for-like basis, the sales rise was 5.8 percent.
SMCP, which is controlled by Chinese textile conglomerate Shandong Ruyi Group and was listed on the French stock market last October, has been powering ahead with store openings around the world.
Since joining the group in 2014, Lalonde has steered it into more balanced territory geographically, bulking up sales outside of its home market of France.
SMCP plans to focus the expansion of Claudie Pierlot mainly in France and Europe, while the label will follow the footsteps of Sandro and Maje as it expands in China, Lalonde explained.
“We’re picking the malls and the cities where we have very strong results and we’re beginning there,” he said in a conference call with journalists, outlining plans to start with larger cities in China for adding Claudie Pierlot stores. The label is already present in Beijing, Hong Kong and Shanghai.
The group set up stores for its other brands in second-tier cities Changchun, Changsha and Zhengzhou over the first half of the year, he added.
In terms of digital sales, SMCP has bulked up the amount of business it generates online in China, which increased from 5 percent in the first half of last year to 13 percent this year, close to the group level of 14.3 percent over the half year. The group operates web sites for each of its brands, and also has partnerships with TMall and Alibaba.
“There’s been a very meaningful increase in our digital business in China,” said Lalonde. Most of its digital traffic comes from mobile applications, he added.
Sandro is exploring new services like one-on-one appointment booking, tailoring, same-day delivery and gift-wrapping at a new pop-up store on Greene Street in New York, in a pilot project meant for expansion into flagship stores around the world.
For the full year, SMCP targets sales growth of more than 13 percent at constant currency and an adjusted EBITDA margin of around 17 percent.
Lalonde said the group would stick to margin guidance of 17.5 percent through 2020, emphasizing plans to continue investing in marketing and communications.
“We’re very mindful in our new regions like North America and Asia Pacific, we need to continue to brand-build and invest in all brand-building activities,” he said.