Only three weeks ago, it was assumed the owner of some of fashion’s favourite premium brands was set for a stock market listing. KKR-controlled SMCP, which owns Maje, Sandro and Claudie Pierlot, said it had begun the regulatory process that could lead to a listing at the same time as it announced a 44% rise in 2015 core profit. It said sales last year rose 33% to €675m.
Reuters reported that the owners had been in talks for a buyout with relatively littl-known Chinese textile group Shandong Ruyi but those talks didn’t result in a deal. But now? Well it has resulted a deal with Shandong Ruyi paying an estimated €1.3bn for control of the group. That’s a shame as I quite liked the idea of buying some shares!
In March, the company had the usual upbeat message about seeing organic growth with CEO Daniel Lalonde sounding pretty happy – but who wouldn’t have been with Reuters suggesting the firm could be valued at a cool €1bn-plus (fashion’s current magic number).
When KKR acquired its almost 70% stake in 2013, the firm was valued at around €650m. Founders Evelyne and Ylan Chetrite and Judith Milgrom together own a little over 21%. So the €1.3bn eventual purchase price is a real reflection of just how strongly the new controlling shareholder thinks this firm can grow, and grow.
The company operates in what’s known as the “accessible luxury” segment, selling dresses for around £200, shoes for around £300 and leather jackets at around £500. That may sound expensive. But compared to the prices charged in the luxe luxury segment, it’s chicken feed – albeit chicken feed that’s made its founders very rich indeed.
What the company does superbly is operate brands with relatively similar profiles and a certain amount of crossover product but manages to draw a distinction between each.
And it’s expanding those brands fast, as the sales figures show, especially in markets like the US, UK, China, Spain and Italy. Over half of its sales came from outside France last year, a 61% rise. And all that has come without fully exploiting menswear and despite its e-tail ops not being that great.
So what does the future hold? Shandong chairman Yafu Qiu said the acquisition is a “significant step” in its aim of becoming a “leader in the fully integrated textiles and fashion business both in China and globally.”
SMCP chief Daniel Lalonde, who’s staying in charge, also said the chains would continue their expansion in Europe, North America, and the Middle East. He also singled out Asia as a key expansion region noting that the group can leverage Shandong’s expertise in the region.
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