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Chinese falter in SMCP bid

A Chinese plan to buy out French fashion label owner SMCP has collapsed.

In January, Inside Retail Asia reported the parent of the Claudie Pierlot, Maje and Sandro brands had attracted takeover offers from Lion Capital and Chinese textile producer Shandong Ruyi Group. At the time, Bloomberg estimated the clothing group could be worth more than US$1 billion.

But this week it emerewaaaaged that controlling shareholder, private equity firm KKR, is now preparing the business for an IPO in Paris by the northern hemisphere summer after talks with Shandong Ruyi broke down. While the door to further negotiations is not closed, it is believed the Chinese company would not meet the price achievable by a float.

With more than 1000 stores in 34 countries, the SMCP group is adding shops in Hong Kong and seeking opportunities to expand in mainland China, CEO Daniel Lalonde said last year. In the first half of 2015 it added 12 outlets in Asia, where it has stores in China, Hong Kong, Indonesia, Korea, Macau, Singapore, Taiwan and Thailand.

The brand’s affordable luxury positioning has found favour with Chinese consumers – the three retail brands in the group have a price point of about 200 euros for a dress.

SMCP turned a pre-tax profit of 107 million euros (US$117 million) last year – a 33 per cent improvement – on turnover up 11 per cent to 675 million euros.

Commenting on the float proposal, Lalonde said the proceeds would be used to help pay down debt and add in the range of 150 – 175 million euros in additional capital.

Founders Evelyne and Ylan Chetrite and Judith Milgrom jointly hold about 21.11 per cent of the company’s stock.

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