SMCP S A : 2023 Universal registration document (translation into english)

Universal registration document

A N N U A L F I N A N C I A L R E P O R T

2023

Table of contents

1	The Group and its activities	5
	1.1	History	6
	1.2	Activities	7
	1.3	The market of ready-to-wear
		and accessories	21
	1.4	Group strengths and competitive
		advantages	23
	1.5	Strategic focus	28
	1.6	Organisational structure	30
	1.7	Legislative and regulatory environment	33
2	Risk factors and internal control		39
AFR
	2.1	Risk factors	40
	2.2	Insurance and risk coverage	59
	2.3	Internal control and risk management	60
	2.4	Supervisory bodies	61
	2.5	The risk management system	62

• SMCP activity in 2023 and

	outlook for 2024							65
	AFR
	3.1	Highlights	66
	3.2	Analysis of activity and
		consolidated results	67
	3.3	Cash flow	75
	3.4	Financial structure	79
	3.5	Outlook	83
4	Financial statements					85
AFR
	4.1	Consolidated financial statements	86
	4.2	Financial statements of the parent
		company	138
5	Non-financial performance			153
AFR
	5.1	SMCP's CSR approach	154
	5.2	Business model	158
	5.3	SMCProduct: producing ever more
		desirable and responsible collections	159

5.4 SMCPlanet: Reducing our environmental

impact

163

5.5 SMCPeople: Unveiling the potential

	of our passionate entrepreneurs	169
5.6	European Taxonomy	177
5.7	Our methodology	180
5.8	Summary table of indicators	183

5.9 Cross-reference table UN Sustainable

Development Goals	190
5.10 Independent third-party report	191

6	Corporate governance			195
AFR
	6.1	Organisation of governance	196
	6.2	Compensation and benefits	223

6.3 Commitments with related parties

and Agreements

253

• Share capital and shareholding

structure257

7.1	Shareholding structure	AFR		258
7.2	Dividends			266
AFR
7.3	General Meeting and voting rights	266

7.4 Elements likely to have an impact in the

		event of a public offering	AFR			267
	7.5	Information on share capital			269
	AFR
8	Annexes	277
	8.1	Presentation of the issuer	278
	8.2	Information about the Statutory Auditors	279

8.3 Information on the universal registration

document

280

8.4 Person responsible for the universal

registration document	AFR		282
8.5 Documents available to the public	282

Cross reference table

283

The elements of the annual financial report are identified in the summary using the pictogram AFR

2023

Universal registration document

I N C L U D I N G T H E F I N A N C I A L

A N N U A L R E P O R T

The universal registration document was filed with the French Financial Markets Authority, the AMF, on April 5, 2024, in its capacity as the competent authority according to Regulation (EU) 2017/1129, without prior approval as allowed by Article 9 of the said Regulation.

This is a translation into English of the universal registration document of SMCP issued in French and it is available on the website of the issuer.

The universal registration document may be used for an offering of securities to the public or admission of securities to trading on a regulated market if supplemented by a prospectus and where appropriate, a summary and all the amendments made to the universal registration document. The resulting document package is then approved by the AMF in accordance with Regulation (EU) 2017/1129.

Copies of this universal registration document are available at no cost from SMCP, 49, rue Étienne Marcel, 75001 Paris, France. It can also be downloaded from the SMCP website (www.smcp.com) or from the AMF website (www.amf-france.org).

Universal registration document 2023 SMCP 1

ISABELLE GUICHOT

Chief Executive Officer SMCP SA

Dear Shareholders,

2023 was filled with geopolitical, inflationary and cyclical challenges, which strongly impacted consumer spending but also the Group's operating costs.

This complex environment has led us to review our objectives and roll out an action plan involving all teams in order to protect our profitability

and our cash flow.

However, thanks to the work and resilience

of the Group's teams, this year was also marked by great initiatives and clear successes in a number of areas.

These specifically include the acceleration of CSR commitments with ambitious objectives such as the reduction of carbon emissions, developing traceability and second-hand, the use of more responsible materials for collections and

the deployment of a global Diversity and Inclusion policy. These are all solid achievements in 2023, that will continue and be strengthened in 2024.

New and beautiful stores were opened, new digital websites launched, and new markets approached, such as India, to establish the Group's reputation, expand its presence and forge close links with customers throughout the world. In addition, continued investments in infrastructure and systems have secured the basics and laid the foundations

for a future that aims to bring efficiency and innovation.

We are extremely proud of the creativity of our brands, demonstrated through our inspired and creative collections and innovative and disruptive communication initiatives, and above all in the motivation and unwavering commitment of our

6,800 employees around the world who fly the flag for our four wonderful brands.

The start of 2024 saw the continuation of a complex environment marked by uncertainty. Against this backdrop, we would like to reassure our valued shareholders that as in 2023, we are fully committed to taking great care in the day-to-day management of our business. At the same time,

we cannot wait to implement our roadmap

to make our brands ever more desirable, agile, innovative and responsible. More than ever, our products and our customers are at the core of what we do every day, in keeping with the spirit instilled by our founders, so that we can successfully, boldly and creatively express our ability to meet challenges together and create a magical future.

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CHRISTOPHE CUVILLIER Chairman of the Board of Directors

Dear Shareholders,

Throughout 2023, the macroeconomic environment has continued to deteriorate, causing a gradual

but significant slowdown in consumption across our entire business scope. This deterioration, coupled with continued inflation, affected the Group's sales growth and profitability. Faced with such a situation, we have called upon our spirit of courage and responsiveness to take stock

of the situation, protect the desirability of our brands and the Group's financial strength. This spirit

has galvanised SMCP teams, under the inspiration of our founders and the leadership of

Isabelle Guichot, our Chief Executive Officer. I know that they will demonstrate the same commitment in 2024 to meet any challenges

that arise, and will do whatever it takes to implement the action plan they have prepared, which aims to encourage sales growth and protect the stability

of the Group's financial position.

In addition to the economic difficulties, I would also note very positive progress in 2023, particularly

in terms of CSR, which resulted in a significant improvement in all of SMCP's external ratings, in particular Sustainalytics and CDP, and which led to the SBTi validation of the Group's carbon trajectory. Our governance in this area has also been strengthened, with the Board

of Directors creating a specialised committee dedicated to CSR, to better support the Group with these crucial issues and systematically integrate them into all our strategic initiatives.

Lastly, I would like to thank all the members of the Board of Directors for their dedication and commitment to serving their Group, and confirm our determination to protect the interests of the Group and all its stakeholders.

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1

The Group and its activities

1. History
2. Activities

1. Group brands and products
2. Geographic footprint
3. Product development
4. Brand image, communication and marketing
5. Distribution
6. Sales force
7. Logistics organisation
8. A unique in-store customer experience

6

1.5 Strategic focus

28

1.5.1 The Group strengthens the uniqueness

and desirability of its brands

28

• 1.5.2 An ambitious sustainable development

7		plan	29
1.5.3	The phygital network strategy to
11
	expand customer contact	29
12
1.5.4	Stronger Group infrastructure to push
13		the boundaries of excellence	29
14	1.6	Organisational structure	30
19
19	1.6.1	Legal organisational structure of the
20
	Group as at December 31, 2023	30
	1.6.2	Subsidiaries and equity interests	32

1.3 The market of ready-to-wear and accessories

1. A large global market
2. Growth of the sector impacted by the macro-economic environment

1.4 Group strengths and competitive advantages

1. Portfolio comprising complementary and desirable brands
2. Competitive brands attracting consumers from all segments of the ready-to-wear and accessories market
3. A unique and proven operating model
4. A strong management team and
   a well-structured organisation to drive future growth

21 1.7 Legislative and regulatory

21		environment	33
21	1.7.1	Consumer protection and e-commerce	33
1.7.2	Product liability	34
	1.7.3	Regulations on the protection of
		personal data	34
23	1.7.4	Regulation of opening hours	35
1.7.5	Regulation of bulk selling, sales, price
		reductions and stock liquidations	36
23	1.7.6	Legal framework governing private
		sales	36
24	1.7.7	International trade and customs duties	36
1.7.8	Tax regulations	37
24
1.7.9	Environmental regulations	37
27

Universal registration document 2023 SMCP 5

• The Group and its activities

HISTORY

1.1 History

Chapter 1

Eighties and nineties: Creation of the Sandro and Maje brands with a wholesale distribution model

In 1984, Évelyne Chétrite founded the Sandro brand in Paris, in the heart of the Marais district. Her sister, Judith Milgrom, worked with her and decided a few years later, in 1998, to create her own brand, Maje. At that time, their designs were sold in multi-brand stores.

Chapter 2

2003-2010: Rapid development in France and implementation of a purely retail distribution model

From 2003 and 2004, the brands were so successful that Judith and Évelyne decided to open their first stores in Paris. Maje's store was located on the left bank (rue du Four), and Sandro's in the Marais (rue Vieille du Temple). In 2007, Ilan Chétrite, Évelyne Chétrite's son, also embarked on the adventure by creating Sandro Homme.

Soon after, in 2008 the 100th point of sale was opened in France for Sandro and Maje.

By adopting this new proprietary distribution model, Sandro and Maje have full control over their distribution, image and commercial policy. This model also allows them to offer their customers the same experience in all points of sale in their network.

In 2009, they decided to collectively buy the Claudie Pierlot brand from its founder, and created the SMCP Group (Sandro-Maje- Claudie Pierlot) in 2010.

At that time, L-Capital and Florac owned together 50% of the capital and 51% of the voting rights of the newly created SMCP Group, the balance being held by the founders and managers.

Chapter 3

2011-2019: International expansion and creation of an omnichannel network

With now 500 points of sale in France, SMCP decided to start a new chapter in its history of growth, that of international expansion by opening its first points of sale outside France:

• in the United States in New York in 2011;
• then in Asia in the cities of Hong Kong in 2012 and Shanghai in 2013.

To support it in this new stage of its development, SMCP was able to rely on the support of KKR, which in 2013 acquired 70% of the Group's share capital, with the directors and founders retaining around 30%.

The Group grew rapidly during this time. In 2014, SMCP acquired its Hong Kong partner AZ Retail Ltd and continued its expansion in Asia. At the same time, the Group created its e-commerce platform and opened its own websites.

In 2015, the Group opened its 1,000th point of sale, including 60 digital points of sale, and generated 50% of its revenue internationally.

In 2016, the Chinese group Shandong Ruyi, one of the largest textile manufacturers in Mainland China, acquired control of the Group from KKR.

In 2017, SMCP, which now generates nearly 60% of its revenue internationally and has a digital penetration of more than 12%, first floated on the stock market in October. As part of a capital increase for a gross amount of approximately €120 million, the Company launched an IPO and saw its shares traded on Compartment A of the Euronext Paris regulated market.

In September 2019, SMCP strengthened its presence in the men's segment through the acquisition of the Fursac brand, one of the French leaders in accessible luxury goods for men, positioned in the modern tailoring segment which combines high-quality tailoring with a casual style.

Chapter 4

Since 2020: Creating global, sustainable and phygital brands

In a context marked by the Covid-19 pandemic, which is helping to accelerate certain consumer trends, SMCP is finalising the development of a new strategic plan, One Journey, communicated to the market in October 2020, which will enable it to build global, desirable, sustainable and phygital brands.

At the end of 2021, the composition of the Company's shareholding structure underwent significant changes (see paragraph 7.1.2).

In 2021 and 2022, SMCP gradually returned to its pre-Covid activity levels, once again crossing the €1 billion threshold in revenue in 2021, and exceeding 2019 revenue in 2022.

In 2023, SMCP has continued to grow its international business with the acquisition of its partner in Australia and New Zealand, and has laid the foundations of a new development by signing a partnership in India.

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1.2 Activities

1.2.1 Group brands and products

The Group and its activities

ACTIVITIES

1

SMCP is an international player in retail, ready-to-wear and accessories sales. The Group markets its collections through a network of physical points of sale and websites.

The Group is structured around four highly-recognised brands, each with its own identity and dedicated design teams and workshops: Sandro (Women and Men), Maje, Claudie Pierlot and Fursac.

These four complementary brands enable the Group to better penetrate its markets by targeting different customer profiles with appropriate product ranges, while sharing a single global platform and a single optimised distribution chain.

The Group is structured around three divisions:

• Sandro: 48.9% of revenue in 2023;
• Maje: 37.6% of revenue in 2023;
• the "Other Brands" division, which combines the brands Claudie Pierlot and Fursac (13.5% of revenue in 2023).

13.5%

Other Brands

48.9%

Sandro

37.6%

Maje

The Group's collections are made up of high-quality clothing and accessories for women and men, in a more affordable price segment than that of luxury brands.

The Group manages the design, marketing and sale of the products under its four brands, thus meeting the needs of a wide audience, mainly between the ages of 15 to 45 years. The Group believes that its Parisian base is a natural source of inspiration and the cornerstone for the positioning of its brands.

The Group's creative approach is focused on capturing fashion trends and consumer aspirations and interpreting them by creating and developing affordable and very appealing ready-to-wear apparel and accessories collections while maintaining a strong attention to detail and craftsmanship, providing luxury, high value-added products.

The Group's margins differ depending on the brand. The highest margins are traditionally achieved through sales of its Sandro and

Maje Women's collections, due to a more advanced degree of maturity in this market, and a critical mass effect to better absorb fixed costs. Sandro Homme Claudie Pierlot and Fursac have lower margins and have significant potential to improve margins as their business and the productivity of their points of sale develop.

Margins also vary depending on the type of product sold. For example, its margins on leather goods may be lower than its margins on ready-to-wear products due to the relative cost of raw materials.

1.2.1.1 SANDRO

The Sandro brand was created in 1984 by Évelyne Chétrite, who is currently its Artistic Director. Initially exclusively aimed at women, Sandro launched a menswear line in 2007 with the creation of Sandro Homme by Ilan Chétrite, the son of Évelyne Chétrite and currently this brand's Artistic Director.

Style and target profile

The products of the Sandro brand form part of a refined and contrasting aesthetic. They combine the need for elegance and subtle details with a fashionable creative and typically Parisian twist. Sandro products are aimed at an urban clientele, who have developed a particular taste for a contemporary and elegant clothing style.

Product offering

The Women's collections are designed as complete and coherent seasonal wardrobes, where each piece complements the others. The combinations are endless and the style versatile. The House, recognized for its suits and coats, also offers a wide range of ready- to-wear products, bags, shoes and accessories.

In the Men's collections, although tailoring remains a strong part of Sandro's DNA, the casual wear collections also have a wide appeal. The Sandro Homme design studio creates complete collections, a clever mix of essential pieces and designs that capture the spirit of the times and the immediacy of desires.

In addition to the two main collections, the brand also offers "capsule" collections(1). These capsules provide a more diverse product offering and surprise customers. As an illustration, in 2021 Sandro launched a collaboration with the franchise Les Monsieur Madame and in 2022 the Hot Stuff comic-themed capsule. In 2023 it introduced a versatile capsule with Wrangler, aimed at both men and women.

(1) The capsule collections comprise a limited number of products marketed over a shorter period than the seasonal collections.

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• The Group and its activities

ACTIVITIES

Geographic locations

The first Sandro store opened in 2004 in the Marais district of Paris. As of December 31, 2023, the brand had 775 points of sale(1) in 46 countries, including 160 in France and 615 abroad. In total, 373 points of sale are intended for female customers, 135 for men ("Sandro Homme" points of sale) and 267 are unisex (Sandro Femme and Sandro Homme). The points of sale are located in the capital cities and major cities of the countries in which we operate.

Sandro points of sale are the faithful incarnation of the brand's values of authenticity and generosity. The refined simplicity of the

graphic codes expresses Sandro's DNA. Light and warm tones combine with the softness of the materials to express an intimate, chic and welcoming atmosphere. Designed with a modern eye and a poetic hand, this concept offers an experience that reflects the heritage and evolution of Evelyne and Ilan Chétrite, by integrating an eco-responsible dimension into the architectural choices. Through craftsmanship elements such as ceramics or wood, the interior architecture of Sandro stores resonates with a very personal authenticity. The Sandro architectural concept is the subtle link between heritage and innovation, timelessness and renewal. The avenue des Champs-Élysées flagship store opened in 2022 is a perfect illustration of this.

The following table shows the breakdown of Sandro points of sale by market as at December 31, 2023:

	Total number
Market	of points of sale	of which Sandro Femme	of which Sandro Homme	of which unisex*
France	160	76	39	45
Spain	35	18	6	11
Germany	32	15	9	8
United Kingdom	26	12	6	8
Switzerland	22	14	4	4
Italy	18	11	2	5
Netherlands	18	8	4	6
Turkey	13	8	2	3
United Arab Emirates	9	3	1	5
Ireland	7	4	-	3
Portugal	7	2	1	4
Egypt	7	3	3	1
Greece	6	3	1	2
Saudi Arabia	6	3	2	1
Lebanon	6	3	2	1
Other EMEA markets	41	19	6	16
Total EMEA	253	126	49	78
Mainland China	105	35	4	66
South Korea	80	49	15	16
Australia	17	11	1	5
Hong Kong SAR	12	5	-	7
Taiwan	7	5	1	1
Other Asian markets	21	9	-	12
Total APAC	242	114	21	107
United States	87	40	21	26
Canada	16	8	3	5
Mexico	17	9	2	6
Total America	120	57	26	37
TOTAL	775	373	135	267

• Points of sale offering Sandro Femme and Sandro Homme products at the same time.

(1) The brand's points of sale include directly-operated and partner-operated stores, concessions, outlets and e-commerce platforms.

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