SMCP has released its H1 results with the Sandro, Maje, Claudie Pierlot and Fursac owner saying it saw “resilient sales excluding China”.

Sales fell by 3.6% on an organic basis to €585 million but grew in America, and were resilient in Europe with a sequential improvement in Q2 in France. Yet clearly, that “continued very slow consumption in China” was a major drag on the numbers.

The firm’s two star brands, Sandro and Maje, saw growth in all regions excluding China during the period.

And the company maintained its “strict full-price strategy” with a two-point decrease of the average in-season discount rate vs H1 2023.

Overall, it looked like Q2 was better for the business with sales in that period down by only 2% organic at €298 million.

Profit was down with adjusted EBIT for the business being 3.2% of sales at €19 million, down from 6% of sales and €36 million a year ago.

One-off effects such as restructuring costs, and inflation played a part here but were partially offset by cost reduction plans.

Net income was actually a loss of €27.7 million after a €14 million profit a year earlier. But this time it included €30 million worth of one-offs, without which the company said it would have broken even.

It also said that it saw “continued financial discipline” with a reduction in inventories of 7% and “strict control of investments”, resulting in a decrease in net debt and in stable free-cash-flow.

Looking at the performance in more detail, the company said sales in France declined by 0.7% to €202.5 million, although there was that increase during Q2 previously mentioned. In fact, the company said Q2 sales in France were up 6% boosted by sales through physical stores both in Paris and other parts of the country, particularly for the two star brands.

The rest of the EMEA region saw organic sales rising 0.8% and reported sales up 1.4% at €191.8 million. The region was operating against tough comparisons from the year before when sales had risen 9% during the first half.

America was up 8% organic and 5.6% reported at €84.8 million. But Asia Pacific was down 19.9% organic and 22.2% reported at €106.2 million on the back of that previously mentioned China slowdown.

By brand, the company’s biggest label, Sandro, saw sales falling 0.7% organic and 1.1% reported to €292.3 million. Maje was down 3.7% organic and 4.2% reported at €218.8 million with China the big problem for both of them. The ‘Other’ brands unit fared worse with organic sales down 13.8% and reported sales down 13.7% at €74.1 million.

CEO Isabelle Guichot said of all this: “In a persistently challenging macroeconomic environment, as anticipated, the group demonstrates resilient performance outside China. The dynamic in America and sound sales in Europe have partially offset the continued weakness in consumption in Asia, particularly in China, where SMCP has already begun to adjust its network of points of sales, while continuing initiatives aimed at revitalising medium-term growth in the country.

“At group level, our action plan launched at the beginning of the year, aimed at reviving our profitable growth, is beginning to bear fruit. Nevertheless, our profitability is still affected by one-off effects related to the restructuring of our store network in China and that of Claudie Pierlot, as well as additional costs linked to inflation.

“In the second half of the year, we will continue our efforts to deploy our action plan both in terms of driving our sales in promising markets and optimising our costs, whose effects should accelerate in 2025 (with the goal of having a positive impact of €25 million on our profitability by 2026).”