SMCP, the French fashion conglomerate behind popular brands Sandro, Maje, Claudie Pierlot, and De Fursac, has recently secured a state-guaranteed loan of €140m ($158m) in response to the challenges brought about by the Covid-19 crisis. This move comes as the majority of SMCP’s stores were forced to close for two months due to the pandemic, with 522 of its 1,632 stores located in France alone. While the exact figure of lost sales during this period remains undisclosed, the company reported a 16.7% drop in Q1 revenues compared to the previous year, totaling €228m.

To secure the loan, which is guaranteed by the French state up to 90%, SMCP negotiated with a consortium of 12 banks, including well-known institutions such as BNP Paribas, Crédit Agricole CIB, and Société Générale. As part of the agreement, SMCP has committed to refrain from distributing any dividends in 2020 and 2021. Additionally, the company has successfully obtained a suspension of its financial covenants for 2020 and an easing of its financial covenants for 2021 from its banking partners. This financial flexibility is crucial, given that the loan represents more than 10% of SMCP’s revenues in 2019, which amounted to €1.132bn.

In response to the challenges posed by the crisis, SMCP has already reopened 96% of its stores and is planning to optimize its retail fleet to reduce operating expenses. The company also intends to adjust its collection plans and place increased focus on promoting the development and growth of its e-commerce sales. With these strategies in motion and the newfound financial flexibility obtained through the state-guaranteed loan, SMCP remains confident in its ability to ensure the profitability of its four fashion brands in the coming months.

Useful links related to the article:
SMCP Official Website
Reuters Article on SMCP’s Sales Plunge