SMCP S.A. (SMCP) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome to today's SMCP Q4 Sales Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today, Wednesday, the 29th of January, 2020. I would now like to turn the conference over to your first speaker today, Célia d'Everlange. Please go ahead.

Thank you. Good morning, everyone. Célia d'Everlange speaking. Thanks for being with us this morning for SMCP Q4 Sales Publication. I'm here with Daniel Lalonde, CEO; and Philippe Gautier, CFO of SMCP. As usual, we will go through the presentation, and then we will have the Q&A session. Before I hand it over to Daniel, I invite you to go through our usual disclaimer on Page 2. And I think we can start now, Daniel.

All right. Thank you, Célia, and good morning, everyone. Thanks for being here this morning. As you've seen from the press release, 2019 showed a robust sales growth, considering that we operated in a very challenging environment, with a continuously sluggish French market and a sharp deterioration in Hong Kong in H2 2019. Our sales grew at 11.3% on a reported basis and 8.7% in organic growth, excluding De Fursac. If I factor out Hong Kong, we would have achieved a growth of 9.6% organic. Throughout the year, we've seen an improvement both in total sales growth and like-for-like, driven by a strong fall/winter collection for Sandro and Maje. On the like-for-like side, the performance was flat for the year, despite a sequential improvement to 0.8% growth in H2 '19. This is better than H1, and we are back to positive like-for-like growth, including a high single-digit like-for-like growth in APAC. Of course, I cannot be satisfied with this. It is below our expectations and below what we're expecting for the coming years. Like-for-like growth is one of our top priorities, and our teams are focusing all efforts on revitalizing it. You will see this during our Capital Markets Day on April 2. In parallel, we opened 90 directly operated stores, both brick-and-mortar and e-commerce websites, over the last 12 months, including some key flagships such as Sandro SoHo, Maje Shanghai ITC and Claudie Pierlot Champs Elysées, as we continue to emphasize quality rather than quantity. And we are now present in 41 countries, with one new country added in 2019 and that's New Zealand. So if you turn over to Page 5, I'd like to spend a few minutes on our progress report for 2019. In 2019, no doubt, we had a number of challenge behind what has been a robust performance. The 2 most important challenges were: First, Hong Kong, where we've seen market conditions deteriorate quite sharply, particularly in Q4 2019. This was and is still triggered by a strong decrease in traffic, around 50% in Q4 versus the prior year. In this context, our objectives are clear: It's to adjust our cost base to mitigate the impact of profitability, and we are taking all the appropriate measures. We have some temporary rent release for 2019 and 2020 on about 30% of our network. We are currently renegotiating 20% of our leases as they expire in 2020. We will close 2 stores in February, and we continue to optimize our retail staff costs. This is and this will remain a continuous process for us in 2019, keeping a proactive approach to adjust our cost base to the Hong Kong environment. Second challenge was Claudie Pierlot. The brand is currently transitioning to become a global brand, offering a more international profile with a contemporary touch, while keeping its original DNA. We have recently launched a consumer study and are continuing to work on the evolution of the brand's marketing and product mix toward this goal. The brand benefits from strong fundamentals, and I'm convinced that we will successively -- successfully achieve this transition as we did many years ago with Sandro and Maje. We've also made some changes in our retail organization in Europe to improve our retail excellence and our execution. I would like now to spend some time on our main achievements for 2019, our new growth platform in Mainland China, a strong progress on accessories, the enhancement of our omnichannel customer experience, and finally, the solid foundations that we put in place regarding sustainability. On Page 6, a few words on China. As I mentioned in March 2019, we made some additional investments to build a fully-integrated platform in China. We have historically worked with a service partner that provided us support for retail ops, both in terms of people and infrastructure. We have decided to go fully direct on this very important market, having developed a strong expertise and solid knowledge of China. We successfully transitioned our platform by scaling up a very strong organization headquartered in Shanghai. This means a team of 63 top talents based in Shanghai; 1 warehouse serving all China, Mainland China and also based in Shanghai; a leading-edge IT system, combined with a very agile supply chain, all of this to serve 160 stores in 28 cities. Today, we added 3 cities, by the way, last year, Hefei, Fushun and Taiyuan and 3 e-commerce sites per brand. So we are now ready to scale the business. Our China team's mission is to elevate and execute top-class retail excellence in a highly demanding Chinese consumer base and to develop localized differentiation by region and by channel, while keeping the Parisian global brand storytelling and DNA. 2019 has been another amazing year for our growth in Mainland China, despite the outstanding base of comps that we had in 2018, by the way, which were above 40% growth in Mainland China at constant currency. We posted growth at over 30% in constant currency in 2019, which was ahead of our expectations. And I'm pretty proud that the growth was very well balanced, with approximately 1/3 of our growth in China coming from like-for-like and 2/3 from space growth. Second, the performance of accessories that you can see on Page 7, this is also an important strategic growth lever. Accessories grew by 18.4% at current currency and excluding different De Fursac, and now represent more than 8% of our sales. Having started with a couple of iconic bags, such as the M Bag from Maje, the Anouck bag from Claudie Pierlot or the Flame sneakers from Sandro, accessories are now meaningful and fully embedded in our product propositions to mix and match the ready-to-wear offer. Our product proposition today ensures good balance between innovation and season and iconic products. Our offer is more diversified, ranging from bags to shoes to new categories, such as belts and jewelry for Maje. All of these are integrated in our communication plan, our store windows, our CRM plans and our in-store visual merchandising. One illustration would be the impressive results of Maje in accessories at the end of the year. The brand executed a strong gifting strategy for the Christmas season, offering a wide range of accessories, mixing small prices and more important items. Throughout the year, they built a large offer around the success of its iconic M Bag: Mini M, a Tote M, et cetera, et cetera, with a lot of derivatives that they completed with the jewelry and many models of shoes. In Q4, Maje has particularly been successful with their necklace line featuring zodiac signs. Number three, our objective to permanently enrich our omnichannel journey with the goal of improving the customer experience. I'm on Page 8 now. I'm fully convinced that we cannot separate brick-and-mortar and digital. There's only one global channel for customers as they do not see things through freestanding stores, outlets or e-comm website. We want to offer seamless customer experience by developing fully-connected stores, which provide an exciting range of omnichannel services and some new tools, such as real-time visual merchandising for a digital learning platform. Having a strong omnichannel customer experience means that the store experience has to be even more memorable. We continue to evolve our store concepts to make it more codified to the DNA of each brand. Here are a few examples with Sandro SoHo and Maje Stockholm flagship stores. We also pursued our French road map. This is about renovating stores to have a qualitative network in France and also optimizing them. In 2019, 100 projects have been executed and our store count decreased by 10 on a net basis that is something that we will pursue in 2020, and I will detail this at our next Capital Markets Day. And to complete the customer experience, we continue to roll out all our omnichannel services such as click & collect, e-reservation, store-to-web, and soon, we will launch a fourth omnichannel service called ship from store. This service enables us to mutualize our global inventories to offer the right products at the right time and in the right place. We've also progressed on winning on social media to engage more customers. Our objective is to increase our digital content to attract new followers, new potential customers. The results are promising as they increased strongly for our 3 brands over the year. Sandro has exceeded 1 million followers on Instagram, and Maje is almost there with 999,000 followers. Last, in 2019, we signed some new e-com partnerships such as Farfetch for Sandro, the ideal partner to enable Sandro to address a wider and more premium customer base, and JD.com in China for the 3 brands. We also opened our own websites in Hong Kong for Sandro and Maje last December. One last quick word on sustainability on Page 10. This has been a key focus in 2019 and will accelerate in 2020. It's a crucial subject for us because simply, it's the right thing to do, and it's a major expectations from our customers and our employees, who are largely millennials. Sustainability has also become a main purchase criteria among our customers, and we are acting on it. Our sustainability journey began several years ago. And in 2019, we have taken many positive actions, such as launching eco-friendly products, reducing the use of plastics in our headquarters, improving our energy consumption in stores and contributing to local green initiatives from New York to Hong Kong. But this is not enough. We need to do more, and we will accelerate. In 2019, we have created a global sustainability committee consisting of engaged and passionate employees from all brands and region. Their mission is to enrich our group sustainability strategy and set some quantitative midterm targets and the road map to achieve these targets. We will detail -- we will share all the details of our global strategy and commitments around our 3Ps for sustainability: product, planet and people at our Investor Day. In parallel to our global sustainability strategy, each brand is actively pursuing their sustainability approach within their unique DNA, and lots of great initiatives have already taken place last year. For example, Maje launched First Stone, a first step on the road to truly eco-friendly fashion. First Stone started with a denim collection to make their products more eco-friendly by reducing water consumption up to 95%. In parallel, Claudie Pierlot launch Claudie Cares, focusing on increasing -- increasingly offering environmentally friendly materials and products, reducing the environment impact of their collections and continuing to put the human factor at the heart of their priorities. And last but not least, one big news in 2019, the commitment and communication of our 4 brands to be fur-free. To conclude, I'd like to provide a quick update on De Fursac. First of all, we are on track. All the teams have started to work together to implement our road map with the objective of growing the brand through international expansion, digital and accessories. The international expansion is a key component of its future growth, and we have started our journey by testing the market in London. We have opened a beautiful pop-up store at Selfridges from December to February. So far, the results are very promising. In parallel, we opened another pop-up store at the Bon Marché in Paris in collaboration with the New York artist, Ryan McMenamy. This is a highly visible location, which drives a lot of tourism, and that will contribute no doubt to grow the international awareness of the brand. So now I will turn it over to Philippe, who will take you through the Q4 financial performance in greater detail.

Thank you, Daniel. Good morning, everyone. So starting with a few highlights for Q4 '19 on Page 13. At constant currency and scope, i.e., excluding De Fursac, the overall performance in Q4 '19 was at 9.6%, in a particularly challenging environment impacted by French strikes in December and a continued market deterioration in Hong Kong. This is up 14.8% as reported, i.e. including a positive currency impact of 1.2 points and De Fursac contribution of 3.9 points and it was fully consolidated in the quarter. As anticipated in Q3 '19, this performance also includes some additional off-price sales operation on past seasons, aiming at accelerating the reduction of our inventories, and we will complete this operation in Q1 2020. Overall, the quarter showed a solid improvement of our fundamentals, with a sequential improvement of our like-for-like sales growth compared to Q3 '19, driven by a positive contribution from all regions including France. In parallel, we pursued our road map in terms of opening, with plus 27 DOS in Q4. So I will now go through our Q4 sales performance in more detail. So moving to the regional dynamics, which are on Page 14. Some quick comments before we go deeper into each region. So with [ plus ] 9.6% of sales growth at constant currency and scope, the quarter has benefited from a strong double-digit international sales growth at 14.7%, driven first by very strong growth in APAC, plus 29.1%; and second, by EMEA, which stood at 9.4%. Meanwhile, France showed a good resilience at plus 0.5%, considering the significant impact of the strikes in December, while last year was impacted by the yellow vests. So if I move to the regional breakdown on Page 15. In France, sales were up 0.5% at constant scope. This performance included a solid performance over the period October to November and a deceleration in December due to the French strikes that significantly weighed on the traffic. Over the quarter, like-for-like sales growth was back positive, with the Provence area offsetting the strike effect we felt in Paris. Overall, we continue to gain market share in France, both in Q4 and for the full year '19 as we did in '18. According to the IFM index, the French market has declined by 1.3 points in '19 and 0.2 points in Q4 '19. Meanwhile, SMCP pursued its network optimization in France with 3 net closings over the quarter and its qualitative investment in key locations, such as Sandro in Strasbourg, as you can see on the right part. In EMEA, sales were up 9.4% driven by key countries such as Spain, Germany, Italy, while U.K., the first contributor in the region, was a bit disappointing, showing a flat performance. This is mainly due to a weak performance in December, while Brexit uncertainties continued to generate some volatility. In addition, the later calendar of Black Friday this year led to a softer performance for Boxing Day. Like-for-like sales growth in the region was slightly positive overall and reached low to mid-single-digit growth, excluding the U.K. Over the last 12 months, we opened 45 DOS located in our key European countries including Spain, Germany and Italy. In parallel, we opened some new POS with our partners, notably in Russia, with 3 beautiful corners in St. Petersburg at the Pont Rouge. Moving to Page 16. We can see that in the Americas, the group generated a good performance, 6.2% sales growth. Considering a still high basis of comp, it was plus 25.7% in Q4 '18. This performance has been achieved through a double-digit retail sales growth. This represents 93% of the total business in Americas, while parter sales decreased due to some rationalization in our distribution. We have decided in Q3 '19 to reduce our number of partner corner by 9 doors. Overall, like-for-like sales growth was slightly positive in the region. Over the last 12 months, we opened 14 DOS, including 10 DOS in Q4 '19, for example, The Grove in LA and Fashion Valley, San Diego for Sandro. Finally, in APAC, the group recorded another very strong quarter, with 29.5% sales growth, despite the continued deterioration of the market in Hong Kong. The very strong performance reflected an outstanding performance in Mainland China, which has been amplified by some additional off-price operations on past season inventories. So even excluding these off-price sales, Mainland China continued to generate a very strong growth of circa 30%, fueled by both high single-digit like-for-like sales growth and the continued strong network expansion as well as further progress in digital, as China's penetration in digital is now slightly higher than the average group level. Over the last 12 months, we continued our expansion with plus 41 DOS, including 3 new cities in Mainland China. Finally, on Page 17, looking at the performance by brand. Sandro and Maje generated a double-digit sales growth at constant currencies and scope in Q4 '19, driven by solid fall/winter '19 collection. Sandro was at plus 10.9%, benefiting notably from the strong performance of the U.S. area and an acceleration of Sandro Men in Europe. Maje recorded plus 12.5% at constant currency and scope. The brand has seen a very strong traction with consumer across Europe and APAC. Its performance also reflected the winning strategy in accessories throughout the year, reaching more than 10% penetration in Q4. Maje has been particularly successful with its gifting strategy at the end of the year. And finally, the other brands, which today only capture the performance of Claudie Pierlot, at constant currency and scope was at minus 4.3%. As Daniel mentioned, Claudie Pierlot was impacted by its transition to become a global brand as well as some execution issues in France. Now to wrap up, and before we pass the floor to Q&As, just a few words on the guidance on Page 19. And this is just to mention that we reconfirm our EBITDA margin guidance. So thank you for your attention, and we are now happy to take your questions.

[Operator Instructions] Your first question comes from the line of David Da Maia from CIC.

Two questions from me, please. The first one, of the off-price sales. Can you give us more detail on the positive impact from your off-price operations on past season inventories? What would have been your organic growth in Q4, excluding this nonrecurring revenue? And the second question on current trading in France. Have you seen any sequential improvement in trends versus December despite the continuing strikes? Are the -- the comps will be even easier in Q1?

Yes. Thank you, David, for those questions. Listen, I'll -- maybe I'll ask Philippe to give a little update on both.

Sure. So your first question on off-price operation. We are talking about off-price operation on inventory of 2018, so that's liquidation on all the stock that we do in a very controlled way. Total impact on the sales on the quarters was about EUR 4.5 million. So it's not truly additional because we usually do some off-price operation but that's the idea. On your second question in France, yes, as you have seen, the impact of the strikes was mostly felt in December. Clearly, November was quite favorable for us in France. And I would say the trend in January continued -- you continued to see an impact of the strikes, somehow it's similar to the trend that we saw in Q4 -- at the end of Q4.

Your next question comes from Melanie Flouquet from JPMorgan.

I have 3, please. The first one is on these off-price sales. Indeed, I wondered -- thank you for quantifying the impact on sales. I wondered whether you could clarify something. My impression is that this all took place in Asia and possibly in China. Why in that market that was actually growing so fast? Was there excess inventories that needed to be cleaned out or if you just allocated it to that market? And what is the impact on gross margin from this off-price activity? That's my first question. The second is on Claudie Pierlot. I appreciate that your Capital Markets Day is in -- is later on and that you will tackle this later on. But could you explain to me what you mean by it's a transition to internationalization that's putting pressure on Claudie Pierlot? Did you experience such things with Sandro and Maje when they went international, that you needed to fix the offer and that it disrupted, in turn, the French business? Can you maybe clarify a bit? And what is that you -- maybe you can share with us already on what you can do to fix the issue. And then sorry, my last question is on the coronavirus. What is your expectation of the impact on your business?

Okay. All right. Thank you, Melanie. Listen, I'll take your second -- it's Daniel, I'll take your second and third question, and I'll let Philippe answer the first. So Claudie Pierlot, what we mean by the positioning is this, is as you know, each brand has a very respectful of their cycle of where they are in their development. So Sandro and Maje have become global brands over the last 5 to 6 years, and therefore, that's why they're present in our 41 countries in the world, and they've gone through that transition. Claudie Pierlot, I wanted to be careful with it as well. It's not present in North America because it's not the right time, and we wanted to continue to build the brand and the business in France and in select European markets. That was really the focus, and it worked very well. The ambition now for Claudie Pierlot is to build on that base and to become a global brand, with a start in Asia. This is where we wanted to start the development uplifts outside of Europe. So what we need to fine-tune is a little bit -- still respect its DNA, its roots, its heritage. But we know we need to make some adjustments in the product mix and in the marketing mix, slight tweaks in image, to correspond more to a global customer, number one; taking also in account the Chinese consumer which is, again, a large potential, which is important for all our brands today, but even more potential for Claudie Pierlot. And that requires some changes in, again, product and in image. Some of the changes, to be more specific I guess, is to develop a stronger, maybe fashion -- slightly fashion component or contemporary components to Claudie Pierlot. I think it's really important, particularly in markets like Asia. So that's what's happening now, and that's what the teams are working on now, and we'll be working through this transition throughout 2020. And yes, it was -- Melanie, we did the same thing for Sandro and Maje, but that was before we were publicly traded. That was the beginning of the, I'd say, 7 or 8 years ago, that was part of the -- what we did for Sandro and Maje. There were some tweaks to make it a global brand, obviously with the objective -- and this is where we will improve on the performance, with the objective of not losing, in fact, our customer base that we've built over the years. And this is why we've made some changes in the organization very recently, in the retail organization, to not lose what we've built, which is the objective. Second question, the coronavirus. Listen, I can just say a few things I'd like to share with all of you. I'm sure it's a question for everyone. First thing is that our -- I'm in contact every day with our teams in Asia, with our CEO and our Head of Mainland China. Obviously, safety first. So we're making sure that our teams are all safe, and that has been the case so far. So that's the priority today. Now it's early to tell. It's been -- we've definitely seen an impact in traffic over the past days like everyone else. And so there will be some impact, this in light of the very strong start that we had in Mainland China for the -- for early January, I'd say. There's been drops in traffic, as I mentioned, some meaningful drops in traffic. At this point in time, as of yesterday, we've had about 10% of our stores that were closed in Mainland China yesterday. That number changes every day. It doesn't necessarily go up. It goes up and down. And what's happening is that local malls are making the decisions to close them all. And in some cities, the cities just make a decision to close the malls as well. In some very rare cases, we've also decided to close stores for safety reasons. But it's something that's happening at a very granular and local level. And yesterday, we had stores closed, obviously in Wuhan, since the crisis. But in cities like Shiyan, Beijing, Chengdu and even Shanghai, not all of our network, but selected stores based on the mall's decision to close the stores. We've also had implemented some shorter operating hours in most of our network in Mainland China today. So that's kind of a latest, if you will, a latest update. I'm on top of it every day with our teams and doing the max possible. Online sales are obviously interesting. We've had a very strong year of online sales last year in Mainland China, and we expect that obviously to continue to grow. Philippe, I think I'll turn it over to you for the first question on off-price.

Yes, Melanie. So on the off-price sales, so as I mentioned, about EUR 4.5 million sales over the quarter. We are talking about circa, that was in Hong Kong and in China. This is stock, which is prior to 2018, so it's old stock. We do this liquidation in a very controlled way, so this will be done through physical outlets. We do that with a partner in China, because we don't have full outlet network in China. We are growing very fast, and we are still missing a few outlets. So that's why we do that through a partner, but it's a partner with -- working with luxury brands usually, so a very controlled way. The impact on the gross margin, we are talking around 30 bps on the gross margin. This was anticipated already in our guidance. And what I would add -- as you know, we have been working a lot on improving our processes in terms of inventory management. So we are also managing the stock that was a bit accumulated in 2018. So this operation will contribute to our -- have our inventory growth back in line with our sales growth, which was the first important objective.

Your next question comes from Geoffroy Michalet from ODDO BHF.

I have 3, but one was on China, so I won't spend time on this because you already answered. Two questions. Online, I see in the mix, quite a slight increase of the online sales. I was wondering if it was actually not going that well in some countries because I had the idea that it was -- that you are actually -- a huge traction in China. So is that a contrast with some other countries? And the second question was on Claudie Pierlot. When do you see the inflection point in terms of like-for-like sales? Do you see it in H1, in full year 2020? Or what can we expect from that?

Okay. Thank you, Geoff. Listen, maybe on the Claudie question. Definitely, we expect that throughout the year. And again, what I'd like to refer back to is the Capital Markets Day where we'll give much more granularity on the plan, where we are and the expectations. But definitely, we expect some improvements in 2020. Philippe, I'll let you answer the online question.

Yes. On digital, there is a slight technical effect because we have a bit adjusted the way we calculate the digital penetration in the U.S. That's based on treatment of return with Bloomingdale's. So I would say, the comparable growth would be more 50 basis points. So if you do apples to apples, we're going from 14.3% last year to 14.9% this year. So it means that we are -- we continue to see progress. And I would say where we do the most progress, this is in China, so we are now higher than the group penetration in China. France was strong -- growing strongly as well. It's almost at 16%, and there was certainly some effect with the strikes, where people are going more online. And last, we did also some good progress in the countries which are catching up in Southern Europe, countries like Italy or in Switzerland or in Belgium, for example, where we implemented e-commerce more recently.

Your next question comes from the line of Kathryn Parker from Jefferies.

So just a few follow-up questions from me. So firstly, on the coronavirus, could you maybe comment on your -- the structure of your rentals in China and whether the variable component is more important than the fixed component?

Kathryn, sorry, can you repeat your question?

Sorry, can you hear me better now?

Yes.

Yes.

Good. Okay. So just on the coronavirus. I'm sorry, I was wondering, in China, the structure of the rents and whether the variable component is more meaningful than the fixed, i.e. if you have a fall-off in traffic, what the impact would be on margins? And then my second question is on digital and what the pipeline for websites in new countries there? And then my final question is on Claudie Pierlot. So clearly, growth is lower, and you're saying this is partly due to the overexposure to France. So I was wondering if you could give some comments on the French market of the performance of Claudie versus Sandro and Maje. Is that clear?

Sure. Okay. Thank you, Kathryn. Well, listen, let me try to tackle quickly your first -- your 3 questions. So for the virus, one, going back to China, most of our rents are in fixed. There are some components in some of the rents as well on variable, when we get beyond a certain threshold, then they go to variable as well. The department stores, which are a smaller part of our mix in Mainland China, are -- mostly are all variable as well. So I'd say it's a mix of both with a slight stronger mix towards fixed rents. I think at this time, to answer your question what's the impact, et cetera, et cetera, I think it's a little early to tell. We're happy to comment on that as the days fold out. It's kind of a movable piece. And as I mentioned, we have 10% of our stores closed today that could go slightly higher in the next weeks or so or it could decline. So I think it's early to tell. But obviously, we're doing all that we can to guarantee the safety of our people, that's the main issue today and to see how we operate in these challenging moments. So we're very proactive, obviously, on this virus. For like -- for e-commerce sites, our focus is going to be -- now we have, I think, 111 POS overall on e-commerce. So our focus -- we've opened some great ones last year. Our focus this year will be mainly on developing the organic growth within the existing perimeter we have on e-commerce. That's the focus. There's not too many new, let's say, planned e-comm sites planned for this year. I'm also very mindful not to crowd the space as we do like-for-like, we're very -- brick-and-mortar, very selective on the stores. I also apply the same feeling towards the online space. We want to make sure it's -- we're developing organic growth as opposed to just adding on new sites. Probably, Canada will be one -- an opportunity for us to open a site. But other than that, it will be a lot of focus on the existing site. And as I mentioned earlier on omnichannel services, which I think is a big opportunity. We're adding probably the most exciting and the hardest omnichannel services, which is ship from store. That -- trust me, we've been working on it for a year, and we're making some great progress, but that's really important now because, again, we can track every piece of inventory everywhere in the world. If a consumer goes online to buy product, and let's say, it's not there, we will have algorithms to find the closest store that has the product and ship it from the store and vice versa. So it's really the biggest and most exciting and most differentiating omnichannel service. And that's where we're putting a lot of our CapEx and OpEx also for online for 2020. Last, on Claudie Pierlot, maybe I'll pass it to Philippe.

Yes, on Claudie Pierlot, I think a question on your -- on the rates we saw on Claudie Pierlot, what I would say, while we talked about that back in December, where we identified the risk, I would say most of the impact was felt in France. So that's part also of what we saw in France, where we said that we did a little bit less than we would have hoped to. Somehow, Claudie was bit more hit than the other brands in the tougher environment in France.