PARIS (Reuters) - SMCP (SMCP.PA), the French group behind fashion label Sandro, said on Wednesday that it would reduce store openings this year and postpone some collections as it tries to offset an expected drag on revenue from the coronavirus outbreak.
SMCP, which is majority-owned by Chinese company Shandong Ruyi (002193.SZ), said its sales for the first quarter of 2020 were expected to be down by slightly more than 20%.
But the company - which also owns brands like Maje, and which reported higher annual results for 2019 - added that it had drawn down on credit lines last week to bolster its cash position, sending its shares soaring 23% in early trading.
They were up 10.5% by 1209 GMT. SMCP shares are down nearly 60% so far this year.
From big, high-end names such as Kering’s (PRTP.PA) Gucci brand to the more “affordable luxury” labels like Sandro, fashion firms have been hit by the coronavirus crisis as governments enforce widespread lockdowns and tourism falters.
SMCP has now reopened most of its stores in China, where the outbreak first started, Chief Executive Daniel Lalonde said, adding that sales there were down some 50%-60% so far this year, an improvement on the 80%-90% decline noted in February.
Lalonde added that the group was now hoping to shift more revenue online as countries including France push retailers to close shops, and said deliveries in Europe and the United States were functioning for now.
SMCP usually opens up to 90 stores a year, but will likely halve that target for 2020, Lalonde said. Some clothing collections would be put on hold and shifted to a different season, he added.
The company said it had more than 200 million euros ($216 million) in cash available to help it deal with the crisis.($1 = 0.9245 euros)
Reporting by Sudip Kar-Gupta, Sarah White and Camille Raynaud; Editing by Kim Coghill and Alex Richardson