PARIS — SMCP, the group behind Sandro, Maje, Claudie Pierlot and De Fursac, reported a 16.7 percent decline in first-quarter sales, hit by the spread of the coronavirus around the world, but noted early signs of improvement in China.
“Our team is now mobilized to prepare for the post-lockdown period,” said Daniel Lalonde, chief executive officer of the contemporary French fashion group.
The pandemic will have a strong impact on the second quarter, but “early signs of recovery in China are encouraging,” he added.
On an organic basis, which doesn’t include a foreign currency boost and the contribution from its recent acquisition, De Fursac, sales were down 20.4 percent, in line with guidance issued by the company last month, totaling 228.7 million euros.
Asia was hit hardest by COVID-19 over the period, and sales in the region declined 33.1 percent on an organic basis to 67.5 million euros. SMCP’s home market, France, was also strongly affected, reporting a 19.4 percent decline to 96 million euros.
The Middle East and the Americas were down 11.9 percent and 17.4 percent, respectively.
Lalonde has been steering the company’s expansion abroad in recent years, adding stores at a steady clip. During the company’s financial update in March, the executive said the company is cutting store expansion plans by half for the coming year. SMCP said Wednesday that they will be decreased by two-thirds.
SMCP has since reopened all of its stores in Greater China, but 82 percent of its points of sale remain closed throughout the world. In Europe, stores are open in Scandinavia and beginning to open in Germany. E-commerce is in operation in the Americas, where its distribution center is operating normally, the company said.
Amid the crisis, SMCP has postponed planned infrastructure investments, reduced operating expenses by renegotiating leases and putting employees on temporary unemployment, and reducing fall collections.
The company is in discussions with banks to shore up its financial flexibility. It drew all of a revolving credit facility in March, and its liquidity position at the end of the first quarter stood at 200 million euros.