French fashion group SMCP has reported mixed results for the first quarter of 2021, highlighting the uneven recovery from the Covid-19 pandemic in different markets. The company experienced a consolidated sales decrease of 2.1% to €223.9 million ($266 million) in Q1, or a decline of 0.6% organically. However, it is important to note that last year’s comparison period included several weeks of lockdowns in multiple markets.

Currently, 45% of SMCP’s directly operated store network remains temporarily closed worldwide. Despite this, there are positive signs in certain regions. The Asia-Pacific market, particularly mainland China, has performed exceptionally well, demonstrating a sales increase of 64.6%. The Americas unit is also showing early signs of a rebound. However, Europe continues to face challenges, although the company’s European teams are actively preparing for the post-lockdown period.

Although cautious optimism exists for the second half of the year with the gradual reopening of the continent, the high level of uncertainty has prevented SMCP from providing any sales guidance for this period.

In terms of Q1 numbers, SMCP saw a significant increase of 38.9% in digital sales, driven by initiatives from its strategic project One Journey. This includes the implementation of ‘Ship from Store’ in France. On an organic basis, sales dropped 0.1% at Sandro, rose 6.1% at Maje, and fell 17% for Claudie Pierlot and De Fursac combined.

The Asia-Pacific market saw remarkable performance in the first three months of the year, with a sales increase of 64.6%. Much of this growth was driven by mainland China, which experienced a 92.6% increase. However, it is important to consider the impact of lockdowns in the previous year when evaluating this figure. Nevertheless, compared to Q1 2019, Chinese sales still increased by 26%. Physical stores played a significant role in this growth, outperforming digital. Other markets in the region, including Taiwan, Macau SAR, and South Korea, also recorded strong performances.

In France, sales dropped by 8.3% organically. This was largely due to restrictive measures, low foot traffic, and reduced tourism levels that negatively impacted sales from January. Additionally, the country faced additional lockdowns in key regions, including Paris, in March. However, there was an improvement from February, and a favorable comparison with 2020 from mid-March. French digital sales, on the other hand, saw impressive growth of 55.5%.

EMEA (Europe, Middle East, and Africa) sales experienced a significant decline of 32.5% organically. This can be attributed to the ongoing decline in tourism, prolonged store closures, and lockdowns in key countries since January. The UK and Ireland were placed under total lockdown, while Germany, the Netherlands, Portugal, and Switzerland experienced extended closures. Digital sales in the region, however, increased by 30.5%.

In comparison, the Americas performed better than Europe, with stable sales and organic growth of 0.4%. Nevertheless, restrictive store measures, especially in Canada, still affected the figures. The region gradually improved from February, driven by increased consumer spending as the vaccine rollout progressed. While physical store traffic increased from January, e-commerce remained strong with a significant 62.8% increase in sales.

Overall, SMCP’s Q1 results demonstrate the varying stages of recovery across different markets. While some regions show promising signs of improvement, others continue to face significant challenges due to ongoing lockdowns and restrictions. As the company navigates through the uncertainties of the pandemic, it remains committed to adapting and emerging stronger in the post-lockdown period.

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