French premium fashion retailer SMCP has reported a nearly 7% decline in sales for the first quarter of 2020 as the ongoing coronavirus lockdown continues to impact its business. The company, which owns popular brands such as Sandro, Maje, Claudie Pierlot, and De Fursac, saw sales fall by 16.7% as reported, or 20.4% on an organic basis during the quarter. These numbers come as a disappointment following a promising start to the year, with the coronavirus outbreak affecting sales in all regions since the end of January.
Although SMCP did not provide specific details on the performance of individual brands, it did highlight that there are signs of improvement, particularly in China. Since March, traffic and sales in China have been gradually increasing, giving hope for a potential recovery in the future.
Despite the challenges faced by its physical store network, SMCP experienced a strong performance in e-commerce, driven by China. The company’s teams have been actively focusing on boosting digital sales while physical stores remained closed. During the first quarter, SMCP closed six directly operated stores and slowed down international store openings as part of its French network optimization plan.
SMCP’s CEO, Daniel Lalonde, acknowledged the impact of the lockdown measures on the company’s business, but remained optimistic about its ability to weather the storm. He stated that SMCP has implemented several measures to mitigate the effects of the pandemic, including reducing capital expenditure, adjusting operating expenses, managing inventories and collections, securing liquidity, and investing in e-commerce operations. Lalonde expressed confidence in SMCP’s strong fundamentals and brands, believing they will enable the company to emerge stronger from this period.
Despite expecting the pandemic to continue negatively impacting SMCP’s performance in the second quarter, the early signs of recovery in China are seen as encouraging. The company remains focused on preparing for the post-lockdown period and is optimistic about its ability to overcome the current challenges and come out stronger in the future.