UK markets closed
  • FTSE 100

    7,019.53
    +36.03 (+0.52%)
     
  • FTSE 250

    22,522.18
    +50.14 (+0.22%)
     
  • AIM

    1,254.25
    +6.12 (+0.49%)
     
  • GBP/EUR

    1.1540
    +0.0029 (+0.25%)
     
  • GBP/USD

    1.3840
    +0.0056 (+0.41%)
     
  • BTC-GBP

    41,114.57
    -4,110.90 (-9.09%)
     
  • CMC Crypto 200

    1,398.97
    +7.26 (+0.52%)
     
  • S&P 500

    4,185.47
    +15.05 (+0.36%)
     
  • DOW

    34,200.67
    +164.68 (+0.48%)
     
  • CRUDE OIL

    63.07
    -0.39 (-0.61%)
     
  • GOLD FUTURES

    1,777.30
    +10.50 (+0.59%)
     
  • NIKKEI 225

    29,683.37
    +40.68 (+0.14%)
     
  • HANG SENG

    28,969.71
    +176.57 (+0.61%)
     
  • DAX

    15,459.75
    +204.42 (+1.34%)
     
  • CAC 40

    6,287.07
    +52.93 (+0.85%)
     

France's SMCP sees late-2021 recovery thanks to China, vaccines

Kate Entringer and Zuzanna Szymanska
·2-min read
A Maje label is pictured on clothes inside a Maje luxury clothing store, operated by SMCP Group, in Paris

By Kate Entringer and Zuzanna Szymanska

(Reuters) - French lower-priced luxury group SMCP, the owner of Sandro and Maje, said it expected a rebound in late 2021 thanks to vaccination progress and strong prospects in China as it reported a smaller-than-expected drop in 2020 core profit.

All retailers were hit hard as governments forced shops to close during pandemic-related lockdowns, but SMCP has been helped by a quick recovery in Asia-Pacific, where it generates a quarter of its growth and plans to double that rate by 2025.

"I think we're going to have a tale of two halves. The first half will still be challenging. However, I really feel optimistic about a recovery in the second half as vaccination reaches decent rates in many countries," Chief Executive Daniel Lalonde told a news conference.

The CEO said the recovery should be especially pronounced in China, where its cheaper alternatives to Prada or Louis Vuitton products continued to gain traction with the fast-growing middle class.

"For the first two and a half months of trading in 2021, the only market that is comparable to 2019 is China," Lalonde said.

However, the company did not provide a detailed outlook for 2021 because of continued crisis-related uncertainties.

Shares in SMCP dropped 2.9% after the announcement.

The Paris-based company said annual earnings before interest, taxes, depreciation, and amortisation (EBITDA) dropped less than 40% to 179.6 million euros ($212.70 million) compared to analysts' average forecast for a 55% decline in a Refinitiv poll.

SMCP added earnings showed a sharp improvement in the last six months of 2020.

Shares in SMCP have dropped 75% since late 2018 as the company was hit by a global economic slowdown followed by the coronavirus pandemic, but started 2021 with a pick-up of about 15% since the beginning of the year.

($1 = 0.8444 euros)

(Reporting by Kate Entringer and Zuzanna Szymanska in Gdansk; Editing by Louise Heavens and Edmund Blair)