The First Purchase Of SMCP, A Light Luxury Group Under The Banner Of The Men'S Clothing Industry In Shandong

SMCP SAS (SMCP.PA) announced the first acquisition since the establishment of the group in the past ten years, with the acquisition of French menswear luxury luxury brand De Fursac.

De Fursac will also be the first independent men's wear brand in SMCP SAS. At present, only three of the group's largest brands are men's wear businesses.

According to the press release of SMCP SAS, the De Fursac, founded in 1973, now has 54 stores in 29 cities in France and Switzerland, and 41 million 400 thousand euros in 2018. In the context of the continuing recession of the French clothing market, it has achieved 5.4% comparable sales growth, and the EBITDA profit rate is higher than that of SMCP SAS.

The group also mentioned that De Fursac has always been the top three Department of French luxury department in French department stores, and is also popular among international customers, especially Chinese tourists.

The controlling shareholder of SMCP SAS is Shandong Ruyi technology group, which acquired SMCP SAS in 2016. The latter still holds 53.7% of the shares after its listing in October 2017.

SMCP SAS chief executive Daniel Lalonde pointed out in the press release that De Fursac will help the group enter the mens luxury market with a scale of 21 billion euros and continue to grow rapidly, thereby speeding up the implementation of the strategy.

The group has set De Fursac and its president Edmond Cohen and art director Alix Le Naour with the help of international expansion, category and style to expand Zhang's short selling target of 100 million euros, and the medium-term goal is to increase the share of De Fursa's international and digital sales to 30% and 10% respectively.

At the analysts' conference call, Daniell Lalonde said his confidence in De Fursac came from the growth momentum of small business Claudie Pierlot and Sandro menswear brand Sandro Homme. De Fursac accounts for only 2% of international revenue, and SMCP SAS has planned to open 5-10 stores each year in Europe and China.

SMCP SAS and De Fursac are currently conducting "exclusive negotiations" and are expected to complete deliveries in the three quarter and contribute to the group's annual profits. Edmond Cohen is also the controlling shareholder of De Fursac.

Daniel Lalonde points out that in the three market segments of men's luxury, Sandro Homme and De Fursac are the leaders of "urban fashion" and "modern suit". Lacoste, Tommy Hilfiger and Polo Ralph are representatives of sports style.

SMCP SAS, which has been slowing down for nearly two years, is in urgent need of developing new markets to create growth. Although the group's sales in the 2018 fiscal year broke 1 billion euros, an increase of 11.5% over the same period, but it was far below the 2014-2018 compound annual growth rate of 18.9%, and the fixed exchange rate growth slowed to 7.2% in the first quarter.

Management still expects sales growth in 2019 after excluding the exchange rate, while adjusted EBITDA margins will generally remain at 16.9% level in fiscal year 2018.

SMCP SAS (SMCP.PA) increased by 4.8% from 13.56 euros on Tuesday, narrowing the decline in the past 12 months to 43%. Author: Lin Biying