The fast pace surpassed the 20.5 percent increase in sales in 2014, when the Paris-based group marked its fifth consecutive year of growth in excess of 20 percent — and eclipses recent results from Europe’s big luxury players.
“We’re having a record year,” said Daniel Lalonde, SMCP president and chief executive officer. “The accessible luxury market is a very relevant one today, for a number of reasons, including the rise of the middle class in China. I think consumers are seeing a very strong value proposition from our brands. It’s accessible, but very fashion-forward and high-quality products.”
Disclosing the results exclusively to WWD, Lalonde trumpeted “high double-digit” like-for-like gains in all key regions — Europe, North America and Asia, including China — as SMCP ramps up its business outside its home market of France.
Controlled by private equity firm Kohlberg Kravis Roberts & Co. LP, the firm said earnings before interest, taxes, depreciation and amortization also rose sharply, above the revenue gain. Lalonde declined to reveal the profit figures.
Like-for-like sales at constant exchange rates increased 8.9 percent to 316 million euros, or $353 million at average exchange rates for the period in question.
The executive credited strong collections — with dresses and skirts particularly hot categories — the novelty of its Parisian proposition and its high-profile stores, often in high-street or luxury environs, for the gains.
SMCP opened 64 locations in the six-month period, 70 percent of them outside of France and 12 of them in Asia, bringing its international business to 48 percent of the total, versus 38 percent last year.
Lalonde said the company would open a similar number of stores in the balance of the year, including locations at Plaza 66 and IFC in Shanghai, the MixC shopping mall in Shenzhen, Hangzhou Tower — plus three locations in Dubai Mall, billed as the largest in the world.
The company entered five new markets in the first half — Mexico, Macau, Sweden, Kuwait and Kazakhstan — and plans to open additional locations in London, Milan and Paris in the second half.
Despite a morose economic climate in France, revenues gained 10.1 percent in reported terms, and 5.9 percent on a like-for-like basis. Lalonde said that performance indicates market share gains, given flat or declining ready to wear sales in France.
International sales rose 64.9 percent and 14.9 percent on a like-for-like basis.
As of June 30, SMCP counted 1,039 points of sale in 34 countries.
Online sales doubled in the first half, which the company attributed to an enhanced customer experience, strong partnerships with online retailers and the launch of omnichannel services.
Since KKR bought a 65 percent stake in SMCP in 2013, the brand has been in an accelerated development phase with a big push into Asia initiated last year.
Despite slowing growth in China and stock market volatility that has spooked global markets, Lalonde remains bullish on SMCP’s prospects there.
“Nothing has slowed down. We’re still in high like-for-like double-digit growth in China,” he said, also citing strong business from Chinese tourists in top European department stores. “We’re very happy so far with the results in China. I think we’ve got the wind in our sails with accessible luxury.”
Ditto for North America, which he characterized as a “high potential market.”
SCMP now counts about 125 locations in the U.S., including partnerships with Bloomingdale’s and Saks Fifth Avenue, with business concentrated in larger hubs such as New York, Los Angeles and Miami.
Having already expanded management ranks last year to support the growth, Lalonde also disclosed two new members of his team. Effective Sept. 1, Philippe Gautier joins as group chief financial officer, and Paul Griffin as ceo of SMCP North America.
Gautier joins SMCP from Sergio Rossi in Milan, where he was chief financial officer. A graduate of elite business school HEC Paris, Gautier has also worked for Puma, Redcats, Schneider Electric and PSA Peugeot Citroën. He succeeds Emmanuel Pradère, who exits SMCP after successfully reorganizing back-of-house operations, according to Lalonde.
Griffin was previously president of North America retail at Ted Baker, having held a number of executive roles at the British firm, where he started in 1999 as a regional manager. He succeeds Dina Emsalem, whom Lalonde credited for consolidating the positioning of the brands. His mission is to selectively expand the retail network, build brand awareness, and eventually introduce the Claudie Pierlot brand.
Lalonde joined SMCP in April 2014 from Ralph Lauren International and before that held several ceo roles at LVMH Moët Hennessy Louis Vuitton, including Louis Vuitton North America. He said his goal is to make SMCP a “global leader in accessible luxury,” which he deems possible without further acquisitions. “There’s so much potential in each brand,” he asserted.
Key growth avenues include accessories, with a more concentrated push into handbags starting with the fall-winter collections, and an eventual foray into eyewear. Lalonde said in the mid- to long-term, accessories could account for 15 percent of its overall business, up from the current 5 percent to 8 percent.
The online channel could also account for up to 15 percent of SCMP’s business in the same time horizon, given its “young-minded consumer;” additional enhancements to its sites, including the option of Web orders and store collection and the addition of more online outlets, such as a shop on Harrods’ site to be added this fall.