PARIS — SMCP, the owner of contemporary labels Sandro, Maje and Claudie Pierlot, has reported a 78.2 percent drop in its net income for 2023, to 11.2 million euros, on the back of weak sales and increased costs.
While sales for the period gained 2.1 percent at reported rates, to 1.23 billion euros, the company said lower than anticipated revenues in China and the slowdown in Europe, especially France, dented its numbers.
Inflation was also a factor in the decline in net profits, as well as for adjusted earnings before interest, taxes, depreciation and amortization, which dropped 11.3 percent to 236.4 million euros.
Anticipating similar trends for at least the first half of 2024, the company is in the process of carving a new optimization strategy, specific plans for which it will highlight in April when it releases its first-quarter earnings.
“We have … decided to accelerate our action plan to revive our profitable growth momentum,” stated chief executive officer Isabelle Guichot. “We will particularly intensify our efforts to enhance the desirability of our brands and in digital, optimize our store network across various regions and delve deeper into cost management, while maintaining our focus on profitability and cash generation.”
A significant rationalization of the company’s store footprint in China is to be one area of focus.
The company expects to reap true benefits from the new plan starting in 2025.
