(News Bulletin 247) – The owner of the Sandro, Maje, Claudie Pierlot and De Fursac brands is jumping on the Paris Stock Exchange while several members of the general staff recently acquired SMCP shares on the Parisian market.

SMCP starts the week with a bang on the Paris Stock Exchange. The specialist in “accessible luxury” jumped more than 8.2%, to 2.455 euros around 11:40 a.m. while several members of management acquired SMCP shares last week.

According to 5 separate declarations made to the Financial Markets Authority dated March 8, several members of the SMCP group’s staff indicated having acquired a total of 174,760 securities for a total amount of 381,562.171 euros.

“These share purchases by the founders send a positive signal to the stock,” a Parisian analyst told News Bulletin 247. Indeed, the leaders of the accessible luxury specialist want to restore momentum to a file which has plunged by more than 28% since the start of the year, after having already conceded 43% in 2023.

A clothing sector in crisis

Like other ready-to-wear brands, the owner of the Sandro, Maje, Claudie Pierlot and De Fursac brands has also been caught up in the purchasing power crisis despite its “accessible luxury” positioning. And the latest announcements have not helped to reassure investors. At the end of February, SMCP lost almost 10% after announcing degraded 2023 results due to “a degraded macroeconomic context”.

The owner of the Sandro, Maje, Claudie Pierlot and De Fursac brands, for example, saw its adjusted operating profit plunge by 28% last year to 79.5 million euros, when the group’s share of net profit fell by it collapsed by 78.2% to land at 11.2 million euros.

SMCP had already warned the market of its difficulties in evolving in a context marked by a serious consumer crisis. At the end of January, the company was once again forced to lower some of its financial targets for the past year, after a previous adjustment last September.

And the current financial year does not look much better for SMCP. The company warned that 2024 is expected to see a comparable trend particularly in the first half. “Given the lack of visibility on the evolution of the consumer environment, the group is not communicating a financial forecast for 2024,” the company indicated.

So to face these headwinds, the specialist in “accessible luxury” has unveiled a plan intended to relaunch its dynamic of growth and profitability. Isabelle Guichot, the general director of SMCP, detailed the cardinal points of this reconquest program, which is based on strengthening the desirability of the group’s brands, optimizing cost management, and continuing to manage ” disciplined” cash flow and debt.

Management will communicate an update of this plan when it publishes first quarter sales at the end of April. It expects to reap the first fruits of this plan from 2024 with the program ramping up from 2025.

A recomposition of capital to come?

Before seeing the first effects of this recovery plan, the main upward catalyst for the stock identified by investors is obviously the outcome of the process of restructuring the group’s capital.

Remember that a group of investors recovered significant shares of SMCP’s capital in the fall of 2021 (29% directly and 8% entrusted to a firm to avoid going above the 30% threshold). These investors then received this participation following the default of a subsidiary of the Chinese group Shandong Ruyi on a loan of 250 million euros. However, this debt took the form of a bond exchangeable into SMCP shares for 37% of the capital.

This group of creditors then launched a process of selling this stake last year.

The board of directors then indicated that it had welcomed this operation “favorably”, which will allow SMCP to “find a clarified shareholder base”, on which the company could rely in order to pursue its development strategy.