Affected By Many Factors, French Fashion Group SMCP Lowered Its Annual Performance Expectations.

The French fashion group SMCP, Ruyi holdings, Shandong, may be one of the best performing companies in the fashion industry. However, due to poor performance in Hongkong and Claudie Pierlot, the group issued a notice on its performance reduction on Friday.

SMCP, who owns Sandro, Maje, Claudie Pierlot and De Fursac, said: "in the past few weeks, the volume of passenger traffic in Hongkong has dropped dramatically and shops have been temporarily closed. The deterioration of this situation is expected to have a significant impact on the group's interest tax depreciation and pre amortization profit (EBITDA). "

The company added: "the performance of the Claudie Pierlot brand is also lower than expected, though smaller than expected, it will also affect the profitability of the group. The brand is not in touch with the fast-growing international market. "

Although there are problems in specific areas and brands, SMCP group still operates well in other fields. The group said: "the performance targets of all other regions and brands have been implemented as planned, and the year-on-year sales growth in the third quarter and the fourth quarter has continued to grow, and the performance in mainland China continues to be strong."

The company now expects the adjusted EBITDA to account for sales between 15.5% and 16% in 2019, and reaffirms that the target of annual sales growth remains unchanged: an increase of 9% to 11% over fixed exchange rates.

SMCP group accounted for 16.1% of EBITDA sales in the first half of this year.

SMCP said it is "closely monitoring the evolution of the market trend in Hongkong and will take all appropriate measures to mitigate the impact, such as selectively optimizing its store network". The group added that, in general, it "remains firmly committed to achieving its strategic roadmap and expects its brand to have great potential in year-on-year growth and global expansion".

However, the company did not disclose what measures will be taken to enhance the performance of Claudie Pierlot brand.