Press Release - SMCP - 2020 Q1 Sales
2020 First quarter Press release
- Paris, April 29th, 2020
Sales performance in line with
expectations
- Q1 2020 sales down -16.7% as reported; -20.4% on an organic1
basis
- Following good start to the year, Q1 sales impacted by Covid-19
in all regions from end of January
- China traffic and sales gradually improving since March,
showing early signs of recovery
- Closure of 6 DOS2 in Q1 20, driven by a slowdown of
international store openings and the French network optimization
plan
- Execution of action plans to mitigate the impact of crisis and
protect cash position
- Good performance in e-commerce driven by China; teams mobilized
to foster digital sales
Commenting on the report, Daniel
Lalonde, SMCP’s CEO, stated: “Following a good start to
the year, all regions have progressively been impacted by the
lockdown measures due to the Covid-19 epidemic. In this context,
SMCP’s key priority has been to ensure the safety and health of its
employees and stakeholders around the world. I would like to
express my gratitude to them, as they have been fully mobilized and
done amazing work in the last few weeks. 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.
Looking forward, although the pandemic will have a strong impact on
our Q2 performance, the early signs of recovery in China are
encouraging. I am confident that SMCP’s strong fundamentals and
brands will enable us to emerge from this period in a stronger
position”.
Unaudited figuresSales in €m except
% |
Q1 2019 |
Q1 2020 |
Organic sales change |
Reported sales change |
Sales by
region |
France |
96.0 |
85.7 |
-19.4% |
-10.7% |
EMEA3 |
79.4 |
70.9 |
-11.9% |
-10.8% |
Americas |
31.7 |
26.9 |
-17.4% |
-15.1% |
APAC4 |
67.5 |
45.2 |
-33.4% |
-33.1% |
Sales by Brand |
Sandro |
132.5 |
105.5 |
-20.9% |
-20.4% |
Maje |
106.9 |
85.7 |
-20.5% |
-19.9% |
Other brands5 |
35.2 |
37.5 |
-18.4% |
+6.6% |
TOTAL |
274.6 |
228.7 |
-20.4% |
-16.7% |
2020 FIRST
QUARTER SALES
In the first quarter of 2020, consolidated sales
reached €228.7 million, down -20.4% on an organic basis. Reported
sales were down -16.7%, including a positive currency impact of
+0.5% and De Fursac’s contribution of +3.7%. This performance
reflected the impact of the Covid-19 epidemic, which resulted in
extensive store closures in Asia from the end of January, and then
in Europe and North America from mid-March, as well as the
suspension of tourism (especially Chinese tourism).
Over the last twelve months, SMCP net openings6
amounted to +77 directly operated stores (DOS). This includes +29
net openings in APAC, +38 in EMEA and +20 in the Americas.
Meanwhile, the Group has pursued the optimization of its network in
France with -10 net closings (DOS). In Q1 2020, SMCP closed 6 DOS7
globally, reflecting 6 store closures in France and a slowdown of
international store openings.
Sales
breakdown by region and by brand
In France and EMEA, sales were
down -19.4% and -11.9% respectively on an organic basis. Following
a good start to the year, performance has been impacted by a sharp
decline in tourism from February (especially Chinese tourism),
followed by a total closure of stores from mid-March. Meanwhile,
the Group generated a solid performance in Digital in EMEA.
Finally, further progress has been made in the French network
optimization, with 6 closures in Q1 2020 vs. Dec 19.
In the Americas, sales were
down -17.4% on an organic basis also impacted by the Covid-19
epidemic. Since February, the Group has seen a slowdown in tourism
(especially Chinese tourism) and has experienced further
deterioration in sales in March following the store closures. The
Group’s distribution centre continues to operate normally to ensure
e-commerce operations. At this stage, digital sales performance
remains soft.
In APAC, sales were down -33.4%
on an organic basis. Following a strong start to the year, sales
were significantly impacted in February by the lockdown in most
Asian countries, especially mainland China. Since then, the Group
has seen some early signs of recovery in mainland China with a
gradual improvement in sales and traffic from March. In parallel,
the e-commerce channel which remained open throughout the crisis,
recorded strong results in mainland China (+39% of sales growth in
Q1 2020). In other regions, traffic remained weak in Hong-Kong and
in Singapore where all stores are closed. In parallel, South Korea,
Taiwan and New Zealand recorded better resilience in sales.
On an organic basis, Sandro
(-20.9%), Maje (-20.5%) and the Other
Brands division (-18.4%) recorded a strong decline in
sales, impacted by the Covid-19 epidemic. Over the quarter, SMCP’s
brands showed a dynamic approach on social media, with a change of
tone to adapt to the current global environment, and to maintain a
close connection with their community and prepare for the post
lockdown period.
UPDATE ON
COVID-19 OUTBREAK AND 2020 OUTLOOK
Since SMCP’s last communication on March 25,
2020, the situation regarding its stores network has slightly
evolved. While most of stores are closed in France, EMEA and
Americas, all stores in Greater China have since reopened.
As of today, 82% of DOS stores are closed:
- In APAC, all stores have re-opened in Greater
China, while they have been closed in Singapore since April 22. In
the meantime, the region’s distribution centre continues to operate
normally. In countries operated by partners, stores are open in
South Korea and partially closed in Australia.
- In France and EMEA, most stores are closed in
Europe, except for Scandinavia. Germany has just started to
gradually reopen from April 23. In countries operated by partners
in the Middle East, all stores are closed. In parallel, the
European distribution centre remains open to ensure exports and
e-Commerce.
- Finally, in Americas, all stores have been
closed since March 18. The Group’s distribution centre continues to
operate normally to ensure the e-commerce operations.
Against this backdrop, the Group has taken
immediate measures to mitigate the impact of the crisis and protect
its cash-flow, including:
- Selecting essential capital expenditure
(c.-40%) with several infrastructure investments postponed, along
with the reduction of 2/3 of its store openings plan (c. 20 DOS net
openings expected this year)
- Reducing operating expenses:
- Renegotiation of commercial leases
- Almost all retail teams in Europe and North America are on
temporary unemployment since the end of March, with support from
local governments
- Strong adjustment in Selling, General & Administrative
Expense (mainly overheads costs optimization and discretionary
spends decrease such as A&P in H1 2020 and travel
expenses)
- Adjusting inventories and collections with a
strong reduction of the FW20 collections buy and some adjustments
in the SS20 collections.
- Fostering operations in e-commerce alongside
brands’ initiatives to engage customers on digital, and all teams
fully mobilized in distribution Centers
SMCP drew the full capacity of its Revolving
Credit Facility (RCF) in March and benefits from a secured
liquidity position of more than €200 million at the end of Q1 2020
to face the crisis period. In addition, the Group has initiated
discussions with its banking partners to further strengthen its
financial flexibility.
In this unprecedented situation, SMCP stands
more than ever alongside its employees, partners and all of its
stakeholders. The global crisis management team, whose priority is
to ensure the safety and health of teams around the world, is
currently working to organize and prepare for the coming transition
period. In order to ensure their protection when stores and
headquarters reopen, the Group has ordered all the necessary
protective equipment including surgical masks, hydro-alcoholic gel
and gloves.
Considering the uncertainties around the
duration and the severity of the epidemic, it is not relevant to
provide forecasts for the full-Year 2020 at this stage, both in
sales and profitability. The Group will monitor the situation
closely and will update the market in due course.
The Group remains confident in its business
model and the attractiveness of its brands. The dedication of its
teams towards ensuring a strict control of its costs will
contribute to mitigating the impact of COVID-19. SMCP’s financial
structure and level of liquidity put the Group in a solid position
to face these exceptional circumstances.
FINANCIAL
CALENDAR
- June 4, 2020 - Annual General Meeting of Shareholders
- July 29, 2020 - 2020 H1 sales
- Sept. 4, 2020 - 2020 H1 results
APPENDICES
Breakdown of DOS
Number of DOS |
Q1-19 (excl. DF) |
2019 (incl. DF) |
Q1-20 (incl. DF) |
|
Var. Q1 20 vs. Dec. 19 (incl. DF) |
Var. Q1 20 vs. Q1 19 (excl. DF) |
|
|
|
|
|
|
|
By
region |
|
|
|
|
|
|
France |
476 |
528 |
522 |
|
-6 |
-10 |
EMEA |
372 |
413 |
413 |
|
- |
+38 |
Americas |
144 |
162 |
164 |
|
+2 |
+20 |
APAC |
188 |
219 |
217 |
|
-2 |
+29 |
|
|
|
|
|
|
|
By
brand |
|
|
|
|
|
|
Sandro |
505 |
550 |
554 |
|
+4 |
+49 |
Maje |
414 |
444 |
443 |
|
-1 |
+29 |
Claudie
Pierlot |
214 |
224 |
222 |
|
-2 |
+8 |
Suite 341 |
47 |
44 |
38 |
|
-6 |
-9 |
De Fursac |
n.a. |
60 |
59 |
|
-1 |
n.a. |
Total DOS |
1 180 |
1 322 |
1 316 |
|
-6 |
+77 |
Breakdown of POS
Number of POS |
Q1-19 (excl. DF) |
2019 (incl. DF) |
Q1-20 (incl. DF) |
|
Var. Q1 20 vs. Dec. 19 (incl. DF) |
Var. Q1 20 vs. Q1 19 (excl. DF) |
|
|
|
|
|
|
|
By
region |
|
|
|
|
|
|
France |
476 |
530 |
522 |
|
-8 |
-10 |
EMEA |
491 |
535 |
531 |
|
-4 |
+37 |
Americas |
176 |
189 |
191 |
|
+2 |
+15 |
APAC |
342 |
386 |
388 |
|
+2 |
+46 |
|
|
|
|
|
|
|
By
brand |
|
|
|
|
|
|
Sandro |
653 |
707 |
711 |
|
+4 |
+58 |
Maje |
549 |
577 |
576 |
|
-1 |
+27 |
Claudie
Pierlot |
236 |
250 |
248 |
|
-2 |
+12 |
Suite 341 |
47 |
44 |
38 |
|
-6 |
-9 |
De Fursac |
n.a. |
62 |
59 |
|
-3 |
n.a. |
Total POS |
1 485 |
1 640 |
1 632 |
|
-8 |
+88 |
o/w Partners POS |
305 |
318 |
316 |
|
-2 |
+11 |
FINANCIAL
INDICATORS NOT DEFINED IN IFRS
The Group uses certain key financial and
non-financial measures to analyse the performance of its business.
The principal performance indicators used include the number of its
points of sale, like-for-like sales growth, Adjusted EBITDA and
Adjusted EBITDA margin.
Number of points of sale
The number of the Group’s points of sale
comprises total retail points of sale open at the relevant date,
which includes (i) directly-operated stores, including
free-standing stores, concessions in department stores,
affiliate-operated stores, factory outlets and online stores, and
(ii) partnered retail points of sale.
Like-for-like sales growth
Like-for-like sales growth corresponds to retail
sales from directly operated points of sale on a like-for-like
basis in a given period compared with the same period in the
previous year, expressed as a percentage change between the two
periods. Like-for-like points of sale for a given period include
all of the Group’s points of sale that were open at the beginning
of the previous period and exclude points of sale closed during the
period, including points of sale closed for renovation for more
than one month, as well as points of sale that changed their
activity (for example, Sandro points of sale changing from Sandro
Femme to Sandro Homme or to a mixed Sandro Femme and Sandro Homme
store). Like-for-like sales growth percentage is presented at
constant exchange rates (sales for year N and year N-1 in foreign
currencies are converted at the average N-1 rate, as presented in
the annexes to the Group's consolidated financial statements as at
December 31 for the year N in question).
Organic sales growth
Organic sales growth corresponds to total sales
in a given period compared with the same period in the previous
year, expressed as a percentage change between the two periods, and
presented at constant exchange rates (sales for period N and period
N-1 in foreign currencies are converted at the average year N-1
rate) excluding scope effects, i.e. excluding the acquisition of De
Fursac
Adjusted EBITDA and adjusted EBITDA
margin
Adjusted EBITDA is defined by the Group as
operating income before depreciation, amortization, provisions and
charges related to share-based long-term incentive plans (LTIP).
Consequently, Adjusted EBITDA corresponds to EBITDA before charges
related to LTIP.Adjusted EBITDA is not a standardized accounting
measure that meets a single generally accepted definition. It must
not be considered as a substitute for operating income, net income,
cash flow from operating activities, or as a measure of liquidity.
Adjusted EBITDA margin corresponds to adjusted EBITDA divided by
net sales.
***
METHODOLOGY NOTE
Unless otherwise indicated, amounts are
expressed in millions of euros and rounded to the nearest million.
In general, figures presented in this press release are rounded to
the nearest full unit. As a result, the sum of rounded amounts may
show non-material differences with the total as reported. Note that
ratios and differences are calculated based on underlying amounts
and not on the basis of rounded amounts.
***
DISCLAIMER: FORWARD-LOOKING
STATEMENTS
Certain information contained in this document
include projections and forecasts. These projections and forecasts
are based on SMCP management's current views and assumptions. Such
forward-looking statements are not guarantees of future performance
of the Group. Actual results or performances may differ materially
from those in such projections and forecasts as a result of
numerous factors, risks and uncertainties. These risks and
uncertainties include those discussed or identified under Chapter 4
“Risk factors” of the Company’s registration document (document de
référence) filed with the French Financial Markets Authority
(Autorité des Marchés Financiers - AMF) on 26 April 2019 and
available on SMCP's website (www.smcp.com).This document has not
been independently verified. SMCP makes no representation or
undertaking as to the accuracy or completeness of such information.
None of the SMCP or any of its affiliate’s representatives shall
bear any liability (in negligence or otherwise) for any loss
arising from any use of this document or its contents or otherwise
arising in connection with this document.
***
A conference call to
investors and analysts will be held today by Daniel Lalonde, CEO
and Philippe Gautier, CFO and Operations Director from 9.00 a.m.
(Paris time).
Related slides will
also be available on the website (www.smcp.com), in the Finance
section.
ABOUT SMCP
SMCP is a global leader in the accessible luxury
market with four unique Parisian brands: Sandro, Maje, Claudie
Pierlot and De Fursac. Present in 41 countries, SMCP is a
fast-growing company which reached the milestone of €1bn in sales
in 2018. The Group comprises a network of over 1,500 stores
globally plus a strong digital presence in all its key markets.
Evelyne Chetrite and Judith Milgrom founded Sandro and Maje in
Paris, in 1984 and 1998 respectively, and continue to provide
creative direction for the brands. Claudie Pierlot and De Fursac
were respectively acquired by SMCP in 2009 and 2019. SMCP is listed
on the Euronext Paris regulated market (compartment A, ISIN Code
FR0013214145, ticker: SMCP).
CONTACTS
INVESTORS/PRESS
PRESS
SMCP
BRUNSWICK
Célia d’Everlange
Hugues
Boëton
Tristan Roquet Montegon
+33 (0) 1 55 80 51 00
+33 (0) 1 53 96 83
83
celia.deverlange@smcp.com
smcp@brunswickgroup.com
1 All references in this document to the organic sales
performance refer to the performance of the Group at constant
currency and scope”, i.e. excluding the acquisition of De
Fursac
2 Including De Fursac
3 EMEA covers the Group's activities in European countries
excluding France (mainly the United Kingdom, Spain, Germany,
Switzerland, Italy and Russia) as well as the Middle East
(including the United Arab Emirates).
4 APAC includes the Group's Asia-Pacific operations (mainly
Mainland China, Hong Kong, South Korea, Singapore, Thailand and
Australia).
5 Claudie Pierlot and De Fursac brands
6 Excluding De Fursac
7 Including De Fursac
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