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SMCP Q1 sales hit by Covid-19 but China shows ‘encouraging’ signs of recovery

By Huw Hughes

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Management

French premium fashion group SMCP has reported a drop in sales for the first quarter of 2020 as Covid-19 took its toll on the business, though it said it is “encouraged” by early signs of recovery in China as the country begins to reopen.

Sales at the group, which owns Parisian labels Sandro, Maje, Claudie Pierlot and De Fursac, reached 228.7 million euros - a drop by 16.7 percent as reported or by 20.4 percent on an organic basis. But those numbers were “in line with expectations”.

The group reported a good start to the year before sales were impacted by Covid-19 in all regions from the end of January. But it added that its traffic and sales in China have been “gradually improving” since March as the country slowly reopens, and although the pandemic will have “a strong impact on” on its Q2 performance, it is encouraged by “early signs of recovery”.

APAC region takes brunt of Covid-19 impact

Breaking the numbers down by region, APAC was most heavily hit by the crisis, with sales down 33.4 percent on an organic basis. In France and EMEA, sales were down 11.9 percent on an organic basis, while in the Americas sales fell by 17.4 percent on an organic basis.

Currently, 82 percent of the group’s directly operated stores across the world are closed due to the pandemic, though all have now reopened in Greater China.

“Following a good start to the year, all regions have progressively been impacted by the lockdown measures due to the Covid-19 epidemic,” said SMCP CEO Daniel Lalonde in a statement.“The group has also taken a large number of measures to mitigate the impact of the pandemic on its activity and balance sheet, reducing capital expenditure to the essential, reducing operating expenses, adjusting inventories and collections, securing liquidity position and fostering operations in e-commerce.

“Our team are now mobilized to prepare for the post lockdown period. In line with our values and commitments, it was also important to think about others and contribute to the collective effort through solidarity actions from our brands.”

Photo credit: Sandro, Facebook

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