SMCP Recovers 15.5% Stake After Singapore Court Ruling

What's Happening?

SMCP, the parent company of Sandro, Maje, Claudie Pierlot, and Fursac, has regained control of a 15.5 percent stake in its capital following a ruling by the Singapore High Court. This decision marks the end of a prolonged legal battle over shares that were transferred to Dynamic Treasure Group, a trust registered in the British Virgin Islands, in 2021. The shares have now been returned to European TopSoho, a Luxembourg-based holding entity and former majority shareholder of SMCP. The legal dispute originated from the financial collapse of Chinese conglomerate Shandong Ruyi, which had acquired a majority stake in SMCP in 2016. The Singapore court ruling follows a similar decision by the English High Court in July 2024, which canceled the sale of the shares to Dynamic Treasure Group.

Why It's Important?

The recovery of the 15.5 percent stake is significant as it brings clarity to SMCP's shareholding situation, enhancing transparency for investors. Although the return of the shares does not immediately alter control of SMCP, it stabilizes the company's financial standing and supports its ongoing growth strategy. This development is crucial for SMCP's largest shareholders, including BlackRock, Carlyle, Anchorage, Boussard, and Gavaudan, who are represented by London-based GLAS. The resolution of this legal issue allows SMCP to focus on its profitable growth strategy, leveraging brand desirability and operational agility, while managing costs effectively.

What's Next?

SMCP's chief executive officer, Isabelle Guichot, is focused on stabilizing the business following store closures in China and expanding into new markets such as India and the Philippines. The company aims to invest in its core brands, Sandro and Maje, and maintain full-price sales and tighter inventory controls. Additionally, GLAS has expressed intentions to offload 37 percent of SMCP's shares, which could lead to a mandatory takeover under French law if acquired by a single buyer. This potential sale could further impact SMCP's ownership structure and strategic direction.