China hits SMCP as it falls into the red for H1

Textile group SMCP (Sandro, Maje, Claudie Pierlot and Fursac) posted a net loss of 27.7 million euros in the first half on Thursday, after a net profit of 14 million a year earlier, while its half-year sales fell by 4% to 585.3 million euros.

The net result would have been “balanced” without 30 million euros of accounting effects, including asset depreciations linked to stores, which pushed the group into the red, it indicated in a press release. Sales are “growing”, with the exception of those made in China which “continue to be strongly affected by the drop in traffic” as well as “by store closures”, the group specified. Across the Asia-Pacific region, SMCP’s sales fell by more than 22% to 106.2 million euros.

“The dynamics of the Americas region and the good performance of sales in Europe have partly offset the persistent weakness of consumption in Asia, particularly in China,” commented the company’s CEO, Isabelle Guichot. SMCP “has already initiated the readjustment of its network of points of sale, while continuing its initiatives aimed at revitalizing medium-term growth in the country.”

The group intends to continue to respect significant financial discipline and is continuing “the optimization of the store network”, with 29 net closures over the half-year, “mainly in Asia and at Claudie Pierlot”, to reach 1,701 points of sale worldwide.

SMCP also reports that it was informed on July 12 of a decision by the British High Court declaring invalid the sale in 2021 of a block of nearly 16% of its capital to Dynamic Treasure Group Limited (DTG), a company incorporated in the British Virgin Islands.

This sale was carried out by the majority shareholder of SMCP at the time, European TopSoho (ETS), owned by the Chinese group Shandon Ruyi. This shareholder has since lost control of SMCP, to the benefit of its creditors grouped within the entity Glas, which today holds nearly 29% of SMCP’s capital.

It was Glas who had brought the case before the British court. “An order should be issued shortly by the judge, aimed at requiring the restitution of the 15.9% stake held by DTG in ETS, currently in liquidation in Luxembourg,” specifies SMCP. This could clarify the shareholder situation of the textile group. (AFP)