(News Bulletin 247) – While more than a third of the group will be put up for sale, the owner of Sandro, Maje or Claudie Pierlot is posting solid results for 2022. A remarkable performance in a damaged clothing sector.

As a change in the round table looms, the SMCP bride is showing off her best side. The annual results of the owner of the brands Sandro, Maje, Claudie Pierlot and De Fursac are solid with a profit which has doubled over one year.

The year 2022 will have been prosperous for SMCP. The “accessible luxury” specialist continues to do well in a clothing sector in crisis, with many ready-to-wear brands falling one after the other.

Over the whole of 2022, the SMCP group recorded a 16.1% increase in its turnover in published data (+13% in organic terms, in other words at constant exchange rates and perimeters), with a fourth quarter marked by “record” sales of 332 million euros.

A very good performance in all areas

Over the period, the accessible luxury specialist recorded a very strong increase in its sales in France, by 23.3% organically compared to 2021. At 414 million euros, the level of sales observed last year increased exceeded that achieved in 2019. In Europe and the Middle East, sales recorded the “strongest growth” of the group with an organic increase of 31% compared to 2021, driven by the largest markets such as Great Britain, the Spain, Germany, Italy and the Middle East.

In America, growth is homogeneous in all markets: United States, Canada and Mexico, indicates SMCP, while online sales continue their “excellent dynamic”.

Sales in Asia Pacific took a hit. Activity in the region fell by 20% on an organic basis due to measures to combat Covid-19 in China. Health restrictions have led to store closures and a drop in traffic in SMCP stores. The Asian markets excluding China, meanwhile, recorded “a good performance”, particularly in Australia with a fully reopened store base, in Korea thanks to strong local demand, and in Singapore and Malaysia which are benefiting from a return some tourists.

“The group again recorded a very good performance this year with sales growth in all regions, with the exception of mainland China due to Covid-related constraints,” said Isabelle Guichot, CEO of SMCP.

SMCP is also pleased with the success of its strategy full price which consists of “deliberately reducing the share of promotional sales” and “significantly reducing the discount rate” both in the network of physical stores and online. The company indicates an “average discount rate down four points in one year and nine points in two years”.

“The work carried out over several years on the desirability of our brands now enables us to adjust our selling prices in the face of inflation, while continuing to deploy our full-price strategy”, adds Isabelle Guichot.

Fewer promotions

This management of rebates results, among other things, in an increase in adjusted gross operating profit (adjusted EBITDA) from 246 million euros in 2021 to 267 million euros in 2022. Adjusted operating income (Ebitda adjusted) increases for its part by 15.6% to stand at 111 million euros in 2022.

The adjusted Ebit margin thus stands at 9.2% in 2022 with a “very satisfactory performance in the second half” since it reached 10.2%. It comes out in line with the expectations of the company, which expected its Ebit margin to be “in line with 2021”.

The ready-to-wear group that owns the brands Sandro, Maje, Claude Pierlot and De Fursac has thus reported a net profit group share of 51 million euros in 2022. Profits have therefore doubled compared to 23 .9 million euros achieved in 2021.

“Clarified shareholding”

For fiscal year 2023, SMCP expects sales growth “in the mid-to-high single digit range” compared to 2022, and an improvement in its adjusted Ebit margin “as a percentage of revenue”.

The company already has its sights set on 2026 and beyond. On this horizon, SMCP is targeting mid- to high-single-digit sales growth through 2026 and then mid-single-digit growth in subsequent years. The group also intends to pursue selective growth of the physical network and maintain a gross operating margin ratio above 75%, thanks to its full-price strategy and inventory optimization.

These various actions will enable the SMCP group to aim for an adjusted Ebit margin of 12% by 2026, then growing by around 0.5 points per year for the following years.

On the sidelines of its results, SMCP returned to the announcement on Wednesday of the upcoming sale of the 37% held by Shandong Ruyi in the capital of the group. Its board of directors indicates that it has “favourably” welcomed this operation, which will allow SMCP to “find a clarified shareholding structure”, on which it could rely in order to pursue its development strategy.

This news had agitated the SMCP title, which was awarded 4.80% on Wednesday. The solid results announced today add 5.2% to the rise of the share, whose performance has risen to +23% since the start of the year.