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Fashion House Smcp’s Bondholders Expect Initial Bids for Their Stake by Mid-may - Sources

A Maje label is pictured on clothes inside a Maje luxury clothing store, operated by SMCP Group, in Paris, France, December 21, 2017. REUTERS/Benoit Tessier
A Maje label is pictured on clothes inside a Maje luxury clothing store, operated by SMCP Group, in Paris, France, December 21, 2017. REUTERS/Benoit Tessier
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Fashion House Smcp’s Bondholders Expect Initial Bids for Their Stake by Mid-may - Sources

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

Bondholders in French fashion group SMCP (SMCP.PA), the owner of labels such as Sandro and Maje, are expecting first-round, non-binding bids for their 37% stake in the company by mid-May, said two people with knowledge of the transaction.

The bondholders, which include asset manager BlackRock and private equity firm Carlyle (CG.O), appointed investment bank Lazard Frères SAS to advise on the sale that kicked off in March.

The 37% stake is worth around 227 million euros ($251 million) based on SMCP's market value of 613.8 million euros at Monday's close, Reuters reported.

Potential buyers include private equity funds and other fashion retailers, said one of the people, who declined to be identified as the information is confidential.

The interested parties are taking into consideration that their acquisition of the stake would trigger a general takeover of the entire company and therefore are assessing the deal on that basis, the person added.

Rothschild & Co is advising SMCP in the sale, the company said in March.

Alastair Beveridge and Daniel Imison of AlixPartners UK LLP, who act as an intermediary for the bondholders, did not immediately respond to a request for comment.

SMCP and the two advisers did not immediately respond to a request for comment.

The bondholders became equity owners in the French company after European TopSoho, a unit of Shandong Ruyi (002193.SZ), failed to meet a debt obligation of 250 million euros ($265.95 million) exchangeable for shares in SMCP in 2021.

The Chinese conglomerate, which embarked on a buying spree in 2015, acquiring labels including Aquascutum, Cerruti 1881 and Savile Row tailor Gieves & Hawkes, sought to build an empire to rival that of luxury behemoth LVMH, but struggled under the debt of its purchases.

SMCP reported 1.2 billion euros in sales for 2022, up 16.1% year-on-year and 266.6 million euros in adjusted earnings before interest, taxes, depreciation and amortization, up 8.5% from 2021.

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Fashion

Primark Boss Marchant Resigns after 'Error of Judgment'

A Primark store is seen on Oxford Street, in London, Britain, January 16, 2023. REUTERS/Peter Nicholls/File Photo
A Primark store is seen on Oxford Street, in London, Britain, January 16, 2023. REUTERS/Peter Nicholls/File Photo
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Primark Boss Marchant Resigns after 'Error of Judgment'

A Primark store is seen on Oxford Street, in London, Britain, January 16, 2023. REUTERS/Peter Nicholls/File Photo
A Primark store is seen on Oxford Street, in London, Britain, January 16, 2023. REUTERS/Peter Nicholls/File Photo

The head of fast fashion chain Primark, Paul Marchant, has resigned with immediate effect after he admitted an "error of judgment" towards a woman in a social environment.
Parent-company Associated British Foods said in a statement on Monday that Marchant had accepted his actions fell below the standards expected, and the head of the 14 billion pound conglomerate said he was "immensely disappointed".
Primark has over 450 stores in 17 countries across Europe and the United States, with Marchant growing operating profit from about 250 million pounds to over a billion pounds during his more than 15 years in charge, Reuters reported.
Primark, founded in Ireland and has a huge presence on British high streets, contributes about half of group profit to AB Foods, which also owns major grocery, sugar, agriculture and ingredients businesses.
Shares in the parent company were trading down 3.5% on Monday morning.
"I am immensely disappointed. At ABF, we believe that high standards of integrity are essential," said CEO George Weston.
"Acting responsibly is the only way to build and manage a business over the long term. Colleagues and others must be treated with respect and dignity. Our culture has to be, and is, bigger than any one individual."
The group said that Marchant had cooperated with an investigation led by external lawyers, and acknowledged his "error of judgment".
It said he had apologized to the individual concerned, the group's board and also to his Primark colleagues and others connected to the business.
Eoin Tonge, AB Foods' finance director, will act as Primark chief executive on an interim basis working with the senior Primark management team and Primark's Strategic Advisory Board, while Joana Edwards, AB Foods' financial controller, will act as interim finance director.
"It is, indeed, a very disappointing, to say the least, end for Mr. Marchant and all at Primark and ABF, where he has overseen the development of a fine value-based retailer with strong prospects for growth," said analysts at Shore Capital.
AB Foods said the group would continue to offer support to the individual who brought this behavior to its attention.