PARIS — Strong growth due to new store openings has led SMCP to increase its forecast.
SMCP, the owner of Maje, Sandro and Claudie Pierlot, reported a 12.9 percent rise in second-quarter growth and increased sales guidance as the company powered ahead with store openings around the world.
Sales at the group totaled 241.3 million euros, up 15.2 percent at constant currency, with the fastest growth coming from Asia, up 47.7 percent.
The sales growth slightly beat consensus estimates of 14.7 percent at constant currency, noted Laurent Gélébart, analyst with Exane BNP Paribas.
SMCP opened 47 points of sale in the second quarter, bringing the figure to 114 over the past 12 months.
The target for full-year sales growth has been raised to more than 13 percent at constant rates, an upward revision from the previous range of between 11 and 13 percent.
Business was also bolstered by a push into the digital realm, which the company highlighted in its statement.
“I am especially delighted with our solid digital sales figures that clearly demonstrate the excellent implementation of our digital roadmap,” noted Daniel Lalonde, chief executive officer of SMCP.
SMCP aims to open between 80 and 90 directly owned stores per year, but is likely to outpace that rate this year, marking a slight acceleration, especially in the second quarter, Lalonde told WWD.
“Our focus in North America has always been on investing meaningfully in digital which has been very consistent,” Lalonde added, noting that the market is one of the company’s strongest in terms of online sales, with more than 25 percent of sales coming from digital channels.
The top three countries in terms of the proportion of business generated by digital channels are the U.S., the U.K. and Germany, he added.
As for new stores, the company plans to continue its expansion in North America focusing on larger coastal cities, with two new stores recently opened at the Brickell City Centre in Miami, for example.
“We’ve always been very selective about opening new stores on a net basis, but we are accelerating it fairly meaningfully in [the second half] and we’ve got a pretty important program planned for 2019,” Lalonde noted. SMCP is focusing on key cities, like Toronto and Vancouver in Canada, and the New York corridor, Miami, Los Angeles, San Francisco and Las Vegas.
“We believe in brick-and-mortar even in America,” the executive said.
Second quarter sales grew 27.1 percent at constant currency in the Americas region to 31 million euros.
The contemporary French brands also grew quickly in Asia, where sales reached 49.6 million euros.
“We’ve also had some great growth in China, which continued to accelerate very strongly,” noted Lalonde. He estimates SMCP’s digital proportion of sales in the country is close to the global level, which stood at 14.3 percent in the first half of the year. SMCP first opened up in China in 2013, launching online through Tmall in 2016 and adding its own web site last October.
“Speed is important and days — these eleven-eleven days and the ability to mobilize an incredible audience on certain moments is quite unique,” noted Lalonde, referring to China’s biggest shopping day of the year, Nov. 11.
Maje had a brand day on Tmall in April, with a big bounce in traffic, drawing around 4.7 million visitors. This also allowed the company to reach 15 new regions in China, he added.
“It’s all mobile, it’s all phones — 90 percent of our business in that region is just done over the smartphone, no one uses credit cards anymore,” he added.
SMCP is also considering other multibrand online platforms in the region, although it is focusing on consolidating its existing digital channels for the moment.
Earlier this month, SMCP owner Shandong Ruyi Group forged a partnership with Secoo, one of China’s largest premium e-commerce platforms, with plans to establish a global omnichannel fashion supply chain covering data, manufacturing and retail.
Sales in Europe and the Middle East rose 15.1 percent at constant rates to 73.5 million euros, with the company registering market share gains in France, where the market was difficult.
In his analyst note to clients, Gélébart characterized Asian growth as “again extremely dynamic,” while the Americas “remained on a strong footing” and Europe and the Middle East were “satisfactory.”
“SMCP is a unique play in the accessible luxury space: omnichannel strength, organic growth, space growth and operating leverage,” Gélébart said.
The French company is controlled by Chinese textile conglomerate Shandong Ruyi Group and was listed on the French stock market last October, generating funds to finance debt payments and fuel international expansion.
Since taking the helm of the company in 2014, Lalonde has steered it into more balanced territory geographically, bulking up sales outside of its home market of France.
“Our regions are well-balanced in terms of sales contribution in a very short amount of time — France, when I started was at 72 percent of sales, it has gone down to 36 [percent] and all of a sudden Asia and North America are by themselves 34 percent of our business, and Europe 30 [percent]. So that’s been an evolution, a fast one,” Lalonde remarked.
SMCP also released a first half like-for-like sales figure of 5.8 percent. The company aims for full-year adjusted EBITDA margin of around 17 percent.