SMCP enjoys improved Q3 in Europe and US, but China stays weak

French premium fashion retail group SMCP reported its Q3 and nine-month results on Tuesday and said its performance in the latest quarter was driven by Europe and the US, while the environment is “still challenging in China”.

Q3 2024 Sales dipped 0.9% to €293 million on an organic basis, although they grew 3.1% excluding China. It saw “good resilience” in America and Europe, despite the negative effect of the Olympic Games in Paris on the business.

The trend improved in September, in particular in France and Europe. In fact, the company said that the new autumn collections have been very well received and the season has started well for Sandro and Maje in France.

The company continued its strict full-price strategy during the quarter with a two-point decrease of the average in-season discount rate vs Q3 2023.

Its nine months, sales fell 2.7% organic to €878 million but rose 1.4% excluding China. It saw a “good performance” for Sandro and Maje in all its markets excluding China.

CEO Isabelle Guichot said: “As anticipated, our growth in the third quarter progressively improved, but remains impacted by the deteriorated environment in China. In France, we posted a resilient performance, despite the impact of the Olympic Games in July and August. We also recorded a solid performance in the rest of Europe, thanks to the continuation of our strict discount rate policy, and in America, where the economic environment remains volatile. 

“We continued to implement our action plan (particularly in China), and notably made significant progress in pursuing the store network optimisation plan, as well as in renegotiations with our lessors. We are confident that this plan will deliver first tangible results as early as 2025.”

Looking at the figures in more detail, the company’s largest brand, Sandro, saw sales rising 1.3% organically in Q3, reaching €145.3 million. In the nine months they were just about flat organically at €437.6 million.

For Maje, the Q3 rise was 0.5% to €113.1 million, but in the nine months they were down 2.3% at €332 million so the latest quarter clearly represented a notable improvement.

For the smaller Other Brands division (comprising Claudie Pierlot and Fursac), Q3 looked weak with a 13.1% drop in organic sales to €34.1 million. But this was a slight improvement on the nine months when sales fell 13.6% to €108.2 million.

Regionally Q3 sales were up 0.4% in France at €97.8 million but down 0.4% at €300.3 million in the nine months. 

For the rest of the EMEA region, they rose 5.4% in Q3 to €102 million and rose 2.3% in the nine months to €293.8 million. 

In the Americas they were up a pleasing 6.6% at €45 million in Q3 and up 6.1% at €129.8 million for the year to date. 

And in the Asia Pacific region they plunged 18.6% in Q3 to €47.7 million, although that China-driven plunge wasn’t quite as bad as the 19.5% drop to €153.9 million in the year so far.