GLAS bondholder group aiming to sell 29% equity stake at fashion company SMCP

A Sandro label is pictured on clothes inside a Sandro luxury clothing store, operated by

A Sandro label is pictured on clothes inside a Sandro luxury clothing store, operated by SMCP Group, in Paris, France, December 21, 2017. REUTERS/Benoit Tessier

PARIS, Oct 29 (Reuters) – The GLAS group of bondholders has taken a 29% equity holding in French fashion company SMCP (SMCP.PA), whose brands include Sandro and Maje, and it will then look to sell the stake, in a move that could result in an ownership change at SMCP.

The ownership of SMCP has been the subject of speculation after a unit of its majority owner Shandong Ruyi (002193.SZ) defaulted on some bonds, which resulted in GLAS moving in.

Shares in SMCP were up 2% by 1000 GMT.

“SMCP reminds that this situation does not affect its own financing and operations. Value creation for all of the group’s stakeholders (shareholders, employees and other partners) is at the heart of the company’s strategy. SMCP and its teams remain fully committed to the implementation of the One Journey strategic plan to 2025,” SMCP said in a statement on Friday.

SMCP added that the GLAS bondholder group, besides aiming to sell off its 29% equity stake in SMCP, would also look to change the board at SMCP.

Shandong Ruyi, which held around 53% of SMCP, once harboured ambitions of creating an empire that would rival that of luxury behemoth LVMH (LVMH.PA).

It began purchasing labels in 2015, a buying spree that would see it acquire London-based suitmaker Aquascutum, Savile Row tailor Gieves & Hawkes and Paris-based fashion house Cerruti 1881, but has struggled under the weight of debts resulting from those acquisitions.

The sprawling Chinese conglomerate’s financial difficulties worsened with the outbreak of the COVID-19 pandemic in China and it failed to secure financing for a $600 million deal to purchase Swiss luxury shoe and accessories firm Bally last year.

SMCP’s fortunes have contrasted with that of its owner Shandong Ruyi, which recently bounced back from the coronavirus crisis, with sales up 54.6% on an organic basis, fuelled by appetite in China for its contemporary French fashion, following a drop in sales of 24% last year.

Isabelle Guichot recently replaced long-time SMCP chief executive officer Daniel Lalonde. Shandong Ruyi acquired the group from private equity firm KKR in 2016.

Reporting by Sudip Kar-Gupta and Mimosa Spencer;
Editing by Jason Neely and Emelia Sithole-Matarise

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