PARIS — SMCP, the group behind contemporary French labels Sandro, Maje and Claudie Pierlot, lowered its annual earnings margin target Friday, citing unrest in Hong Kong.
The company targets an adjusted margin on earnings before interest, tax, depreciation and amortization between 15.5 percent and 16 percent, compared to a previous target for a similar level as last year’s 16.9 percent.
In a statement, SMCP said it had seen a “sharp market deterioration” in Hong Kong with a significant drop in traffic and temporary store closures in recent weeks.
The group also cited weakness at its smallest label, Claudie Pierlot, which has less of an international presence than Sandro and Maje.
In other regions and for its other brands, the group is “delivering according to plan,” SMCP said, noting positive like-for-like sales in the third quarter as well as fourth quarter so far, with a “continuously strong performance” in mainland China.
SMCP has been rapidly expanding its store network abroad, particularly in Asia and the Americas. Meanwhile, it has been downsizing its network in France, where it closed six stores over the period, but recently opened a new store on the Avenue des Champs-Élysées for its Claudie Pierlot brand, seeking to draw tourists into the location with a new, sleeker format.
Listed on the Paris stock exchange in 2017, SMCP is controlled by Chinese textile conglomerate Ruyi Group and recently acquired men’s wear label De Fursac, a deal that was finalized Sept. 5.