Ladies and gentlemen, thank you for standing by. Welcome to the SMCP Conference for the Q1 Sales Communication. At this time, all participants are in the listen-only mode. Happy to speak to your presentation. There will be a question-and-answer session. To ask a question during the session, you will need to press star one on your cell phone. Also, it must be advised that the call is being recorded today, Wednesday, the 29th of April, 2020, and without any further delay, I will now let hand over the call to your first speaker today, Ms. Célia d'Everlange . Thank you. Please go ahead.
Thank you. Good morning, everyone. This is Célia d'Everlange , Head of Investor Relations Team. Thanks for being with us today for SMCP Q1 sales. I'm here with, if I can say, with CEO Daniel Lalonde and CFO Philippe Gauthier. We are once again meeting under special conditions, as I'm sure most of you are probably listening to this call from home. On behalf of all of us at SMCP, we wish you well. We hope the technical condition will be okay today due to the context, and as usual, we will go through the presentation, and then we will have the Q&A session. Before I hand it over to Daniel and Philippe, I invite you to go through our usual disclaimer on page two, and I think we can start now. Daniel.
Yep. Thank you. Thank you, Célia , and good morning, everyone. Thank you very much for being with us this morning. As Célia said, I really hope that you're all safe and your families and loved ones are all well in these unprecedented times. I'll begin with a quick overview of Q1, 2020, and an update on the COVID-19 situation, then Philippe will detail our sales performance by region. If you go to slide four, as you've seen from the press release, Q1 was in line with our expectations, even slightly better, thanks to a better performance than expected in Mainland China. SMCP sales were down 16.7% on a reported basis and 20.4% on an organic basis, i.e., where we exclude the Fursac and that constant foreign exchange.
So this performance reflects the impact of this COVID-19 pandemic in all regions across the world, following a great start to the year, a gradual improvement in sales and traffic in Mainland China since mid-March, showing early signs of recovery, which for us is encouraging. In parallel, for the first time in history, the group closed six DOS in Q1, 2020. This has been driven by, first, a slowdown of openings in our international markets. Basically, net openings are almost flat outside of France. Q1 is usually a small quarter in terms of openings, but obviously, we decided to postpone most of our projects until either the end of this year or next year. And I will come back to that in a minute. And then second, we made good progress on our French optimization plan with six additional closures in the Provence area.
As mentioned on March 25th, the group has decided to take immediate measures to mitigate the economic impact and protect its cash flow. Since then, we have executed our plan, and I will detail these remedies in a minute. Finally, considering this very unusual context, we recorded good performance in e-commerce, notably in China, where sales were up 39% in Q1. Since the beginning of the crisis, the teams have been fully mobilized to foster digital sales through several initiatives, and one example is our latest operation on Tmall on page five, so moving to page five, we have been selected by Tmall to launch our first live streaming event on prime time, which is from 8:00 P.M. to 9:30 P.M. Following the reopening of our stores, we agreed to participate as we're able to propose full personalized services in store in parallel.
We launched at Sandro this Monday and from Maje just today on prime time. The concept is a new form of TV shopping with the objective to showcase our collections by leveraging some key celebrities or influencers in China. For this first event, we selected Linda Li for Sandro, a runway model in China, one of the most active Chinese participants in the luxury fashion shows, gathering approximately four million followers on Weibo and WeChat, and Yuyu Zhangzou for Maje, a key influencer in China with over four million followers on Weibo and WeChat. During the one and a half hours, they will shop in some of our key stores and present our key looks, introducing new trends and mix and matches live on Tmall apps. On the same screen, customers will be able to shop directly.
Through this new form of shopping, reinforcing the omnichannel experience, we'll be able to fully leverage the Tmall traffic and extend our customer base. The first test on Tmall from April 27th to May 1st is very positive, as the first day for Fursac and Sandro, we reached almost half of our sales objectives with approximately 75,000 viewers just during this one hour and a half. A couple of comments on the current status of our stores and our e-commerce network by region. Starting with our physical stores, 82% of our DOS are closed today. In France, all of our stores have been closed since mid-March, and we expect a gradual reopening of our stores from May 11th onwards based on recent government guidelines. In EMEA, 100% of our 370 DOS stores are closed, except for Scandinavia.
Since April 23rd, we've also started to gradually reopen our stores in Germany, approximately 10 stores. In countries operated by our partners, such as the Middle East and Russia, all stores are closed. In the Americas, 100% of our 157 DOS in the U.S. and Canada have been closed since March 18th, while our partner stores in Mexico are also closed. Finally, in APAC, all of our 195 physical DOS in Greater China are now open. They started to gradually reopen at the end of March. Meanwhile, our partner stores are open in South Korea but partially closed in Australia. In parallel, as you know, all our e-commerce operations function normally, and teams are fully engaged digitally with our customers.
Turning to page 7, as mentioned in our fiscal year results, we've decided to launch a strong action plan addressing the entire group cost structure, aiming at mitigating the impacts of COVID-19 on group profit and cash generation. Let me give you an update on what has been done so far. So first, on CapEx, the objective has been to meaningfully reduce it by only keeping our essential projects. Greater focus has been allocated to our digital roadmap, which is more than ever the driver of growth today and in the future. We have thus, for example, maintained our investments in one of our key projects called Unified Commerce, which is ready to start for Maje in Europe today. We'll also comment on that in further detail in Q2.
In parallel, we've decided to significantly reduce the number of net openings this year to 20%, representing an adjustment of about 75% compared to last year. On one side, we have selected key openings, notably in China, to balance our investment between future sales growth and cash management, and on the other side, we will pursue and accelerate our optimization plan in France. Overall, our CapEx will decrease by around 40% this year compared to last year. Second, on OpEx, so we've actively worked on optimizing our cost basis, i.e., store cost and SG&A cost. For our store cost, the three most important components are commissions, which are fully variable and represent a bit less than 30% of our store cost last year. Second, personnel costs that represent a bit more than 30% of our store costs in 2019.
We have placed our retail teams in temporary unemployment, both in Europe and North America, with the support of the local governments. This action represents a substantial cost reduction starting in the last week of March and will continue through April and a part of May, and last, costs that represent a bit less than 30% of our store cost in 2019. We have reached out to all of our landlords to discuss adjustment of our leases. It's about negotiating rent relief during the period of the lockdown and lower rents for the slow recovery period that we anticipate. We've already quite advanced, starting in Asia but also now in North America and in Europe.
In parallel, we continue to adjust our SG&A cost in 2020 through first, strong efforts on overheads, including fixed compensation freeze, reduction in the variable compensation, adjustments in the HQ headcounts, and a reduction of 30% of the Comex and board's fixed compensation during the crisis. Second, some savings on discretionary spending, such as offline A&P in each one, external services, and obviously T&E expenses. All in all, we should be able to variabilize more than 50% of our group costs. Third, inventory management. To limit the surplus of inventory at the end of the year, we are adjusting our collection plans between Spring/Summer 2020, Fall/Winter 2020, and Spring/Summer 2021.
We have also reduced the Fall/Winter 2021 collection by, and we continue to centralize our inventories to ensure the best allocation by region in order to have the right product at the right place and at the right time. Fourth, e-commerce. As I mentioned, this is and will be a key driver to our future growth. This was a key strength in China during the peak of the crisis, as we recorded some very strong results in our e-commerce channel. And all the teams today are fully mobilized to engage as much as possible with our customers on digital. Several initiatives have been launched to foster this channel, like the Tmall live streaming operation. And of course, some specific operations are also planned by our teams in Europe and North America.
In parallel, as I said in March, we drew the full capacity of our RCF, and we now benefit from a solid position to face the cash burn during the crisis and all of our short-term maturity reimbursements. In addition, we are in close contact with our banking partners to look at all options to further strengthen our financial flexibility. Last, we stand more than ever alongside our employees, partners, and all of our stakeholders. The global crisis management team, whose priority is to ensure the safety and health of our teams around the world, is currently working to organize and prepare for the upcoming transition period.
I'll pass it to Philippe.
Thank you, Daniel, and good morning, everyone. Moving to the regional breakdown on page 9. In France and in EMEA, sales were down, respectively, 19.4% and 11.9% on a normal basis. This performance includes three distinct periods. First, we had a good start of the year, i.e., for the month of January. Second, a sharp decline in tourism from February, especially Chinese tourism, which was down 50%, for example, in February in Europe. Third, deterioration in March linked to the total closure of our stores in most of our countries, except for Scandinavia. In the meantime, EMEA recorded a good performance in e-commerce, driven by strong trends in Germany, Switzerland, and Benelux, which led to a better resilience of some of these markets, with Germany notably being flat in Europe.
In parallel, we made solid progress against our French optimization plan with six additional closures versus December 2019, mostly in the Provence area outside of Paris. Overall, in France, we demonstrated a better resilience than the French market. The IFM Index was - 22.9% in Q1 versus SMCP at - 19.4%. In the Americas, sales were down 17.4% on a normal basis, also impacted by the COVID-19. Since February, the group has seen a slowdown in tourism and experienced further deterioration in sales in March following the store closures. The group's distribution center continues to operate in North America normally to ensure e-commerce operations. However, e-commerce performance has been stopped at this stage.
Turning now to APAC performance on page 10, sales were down 33.4% on an organic basis for the region. Following a very strong start of the year, sales were significantly impacted in February by the lockdown in most Asian countries, especially Mainland China, from January 24th. Since then, the group has seen some early signs of recovery in mainland China, alongside a gradual improvement in sales and traffic from March onwards. On the bottom of this slide, you can see the evolution week by week of mainland China's sales for our physical stores. With the reopening of our stores from the end of February, the performance has sequentially improved, even with slightly better traffic and conversion rates. This encouraging trend is notably observed in the south of China, with a few cities being positive versus LY in April. Overall, sales decline has been reduced from circa -80% in February to circa -35% in March. This encouraging trend has been confirmed as well in April.
In parallel, the e-commerce channel, which remained open throughout the crisis, recorded very strong results in Mainland China, + 39% sales growth in Q1 2020. Thanks to several initiatives designed to encourage sales on digital, such as the Women's Day at the beginning of March, which will be followed by the live streaming event mentioned by Daniel. In other regions, traffic remained weak in Hong Kong, as access from the Mainland remained closed. On the positive side, Taiwan and South Korea recorded a better resilience in sales.
All right. Thank you, Philippe. In closing, on page slide 12, I'd like just to say a few words on 2020. In this context, SMCP sales and profitability, as you know, are meaningfully impacted. As we have described, the group has taken immediate measures to mitigate the economic impact and protect our cash flow. In parallel, our teams are fully focused on preparing the post-lockdown period while ensuring the safety of everyone when stores and headquarters are open. We have also ordered all the necessary protective equipment, including surgical masks, hydrogel, and gloves. We have also adapted our selling ceremony to protect our customers and our teams during this period. So given the uncertainty around the severity and the duration of the COVID-19, it's not relevant for us at this time to provide specific guidance for our 2020 financial performance.
We will continue to monitor, obviously, the situation closely, and we'll update the market in due course, and finally, on page 13, a few words just to highlight some of the solidarity actions taken by SMCP and our brands. In line with our values and commitments, SMCP and all of our employees wanted to contribute to the collective effort and help others through fabrication and donation of masks, as well as a couple of other meaningful initiatives, so thank you for your attention this morning, and I think we're happy now to answer your questions. Thank you.
Thank you, Daniel. Then we will now begin the question and answer session. Again, as a reminder, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. And if you wish to cancel your request, please press the hash key. Once again, press star one should you wish to ask a question. So our first question is from the line of Chiara Battistini . Thank you. Please go ahead.
Hello. Good morning. Can you hear me?
Yes, very well, Chiara . Good morning.
Yes, perfect. Thank you. I have a couple of questions, please. The first one is thinking about your opening plans beyond this year. Is the current situation and maybe also further growth in e-commerce penetration making you rethink your opening plans and how the service works in the medium to long term? And especially as you continue to.
Chiara ?
Yeah,
We didn't hear the end of the question. Your question was the opening plan beyond 2020?
Yes. And if you're actually rethinking about the strategy and your store network for the medium to long term, given the possibility that it's becoming more and more of a key channel. And the second question, again, on e-commerce, you have mentioned in the press release and the presentation that e-commerce was stopped in North America in Q1. Could you please provide more color on this? And also, if you could provide the development of e-commerce at the group level for Q1, please. Thank you.
Okay. Daniel, I don't know if you heard the question. The first question is the opening plan beyond 2020. Okay. You heard? Okay.
Yeah. And at group level. Listen, thank you, Chiara , for your questions. So on your first one on the, I guess, the physical brick-and-mortar store opening beyond 2020, just say a couple of words. The first is the target we have in net openings that we mentioned for 2020 is 20%, roughly speaking. So that's very much as a result of COVID-19. But beyond that, beyond 2020, clearly, one of the big factors of growth and investment for us will be on the digital and omnichannel segment and also driving more initiatives to drive like-for-like growth. So these will be, and they were at the beginning of the year, our major objectives for this year, and they will be beyond. The question is, what does that mean in terms of new store openings in the future?
Again, 20% is as a result of this year, but I can say simply that it will be less net new store openings than we've had in the past. And as you know, we've added in the past roughly 80-90 DOS per year, which is something that we've done. So you can expect we certainly expect that number to be reduced to 20%. 20% is for this year, but it will be reduced in the future with a greater focus and investment on developing like-for-like through digital, omnichannel, sustainability is a really big investment that we have also in the future. So there'll be new drivers for the future.
In terms of e-commerce, second question in North America. Yeah, it's been a little bit softer, as we mentioned. I mean, we've had some interesting weeks in the last couple of weeks in North America, but we've seen overall, as you've seen, we've had some very strong results in China, double- digits, which continue through today, which is good. Europe also, we're in a double-digit growth mode on the e-commerce channel for April, but it's been a little softer in North America. Why? I think there's many reasons. I think the customers perhaps are not there and not shopping as much in this market. It's the market that's the most affected today. But we expect this to change. We've just seen a much lower growth than in Europe and in China today.
So you said that--
Can you carry on that question at group level e-commerce?
Yes.
Yeah. What was your specific question, Chiara , on that?
If you could give us the rate of growth or development year on year in Q1 for e-commerce group level?
Yes. Philippe, did you want to take that specific question?
Yeah, sure. Yeah. Hold on one second. Yes. At group level, we are basically flat in e-commerce for Q1. As Daniel mentioned, there are different situations in the regions, so APAC being really growing very fast, almost 40%, and then a reduction in Americas, and very favorable in EMEA. France almost flat. In EMEA, you have certain countries where there is a very strong progression, and for example, it's Germany where the penetration is already very high, where it goes to 50% penetration in e-commerce in Germany for the full quarter, so we are benefiting from these countries. In the north, they are benefiting from the stronger penetration of e-commerce.
Just to conclude on that point, Chiara , we do expect, and we saw in the first quarter and in the future as well, the e-commerce penetration rate will increase. I think what we're seeing today is I think it will probably even accelerate versus maybe the original plans we had, which were fairly optimistic and aggressive. I think this moment will even enable us, and I think just the industry in general, to accelerate the e-commerce penetration in our business. It's certainly what we've seen in Q1, and I expect that to continue throughout the year.
Understood. Thank you very much.
Thank you, Chiara . If you have any further questions.
Yes, ma'am. The next question is from the line of David Da Maia. So please ask the question.
Hello. Good morning. Can you hear me?
Yes, very well, David. Good morning.
Okay. Thank you. Two questions for me, please. The first one on like-for-like. I know you don't provide like-for-like on a quarterly basis, so I will ask the question differently. Is it fair to assume a mid-single-digit positive contribution from new space as we only closed six DOS in Q1? The first question. The second question on break-even or cash burn, we already know that Q2 will be the worst quarter of the year. In this context, do you think you would be able to generate a positive adjusted EBITDA with like-for-like sales down probably by -40% in H1? It would be very helpful if you can give us some information on the break-even point before or maybe after the testing measure you are currently implementing.
And the third one is on the liquidity risk. Can you please give us an update on your current negotiation with the banks? What are the different options you have today? Are you going to ask for a term loan facility from the French state in order to secure the cash flow and better prepare the recovery?
Okay. Thank you, David. Philippe, do you want to take the three questions?
Sure. So the like-for-like, as you can imagine, the trend in the like-for-like is not very different from the overall trend. So we are thinking about a reduction, which is a bit over 20% across the board with the nuances that we explain also in terms of our geographical performance. So this is not very surprising. If I think a bit about the cash burn and break-even point, I'm not going to provide you guidance on the quarter. Like we explained, we don't feel it makes too much sense. What I can tell you is that clearly we have been acting a lot on our cost base. And as Daniel mentioned, we are able to make variable about 50% of our store, of our cost, be that our store cost or our SG&A. And we have been very active.
A lot of these reductions are touching the Q2, be that for the leases. Also, from a cash point of view, the first step we have done is to connect with all our landlords in Europe to delay the payment of the Q2 rents. This has been done in agreement with the landlord, and almost 90% of the landlord has agreed with that. Then we have been in negotiation, and we are quite advanced in terms of obtaining savings. There is an offset here. There is an offset in temporary unemployment because we will reduce the bulk of our store staff costs in Europe and North America. Then we have significant savings in SG&A. What I would say is that we are able to reduce significantly our fixed cost during that period to reduce the cash burn in April and May.
Maybe your question on the liquidity. So as Daniel mentioned, we have taken all the actions to work both in terms of mitigation actions that we just described, as well as in terms of financing. The first step we took was to grow the full capacity of our EUR 200 million RCF. That's where we had end of Q1 cash position over EUR 200 million. And the idea is that this is sufficient to face on one side the maturity that we have on our Commercial Paper program and on the other side the cash burn that we expect during the lockdown period. So that's the first thing. So we have sufficient cash. And now we have been in close contact with our banks to further strengthen our flexibility. And what we mean by that, there are two aspects. One is the provenance.
We have, as you know, a long-term credit facility for five years of EUR 465 million, on which we have covenant of three times EBITDA. So we have initiated the discussion with our banks to obtain a covenant holiday. And I mean, our banks are very supportive, and they understand that this level of covenants cannot be really maintained in such an exceptional period. So that's one thing. And then, as you mentioned, we are looking at French facility guaranteed by the French state, so-called PGE in France. That's an option which is available to us that we are willing to look at as a precaution to provide us more headroom in case there would be further risks. So we feel that makes sense. And we have started the discussion with our banks on this topic, and they are certainly open to that.
Thank you, Philippe. Thank you, David. Do we have any questions?
The next question is from the line of Aurélie Husson-Dumoutier. Thank you. Just ask it.
Hello. Good morning, Aurélie.
Yes. Can you hear me?
Yes.
Good morning, everyone. I have several questions, please. Can you tell us about the stores in Germany that have just reopened? I know it's very early stage, but are you seeing normal traffic? What is the level of sales? Just to have an idea how sales could react in France after the 11th of May. My second question is still on France. Can you remind us what is the percentage of your stores that are in malls and in malls above 400,000 square meters? And maybe you have given it earlier in the call. I'm sorry if I asked you to repeat it. Can you give us an idea of the CapEx for 2020 and 2021? Thank you very much.
Okay. Thank you, Aurélie. Maybe Daniel, you want to take the question about Germany opening? How is the traffic sales and how many stores, etc.?
Sure. Célia, yeah. I can even touch upon the other ones quickly and maybe Philippe complete the last. So it's very early days in Germany. We opened roughly 10 stores last week. And listen, traffic was obviously meaningfully down, but in some of the stores that we've opened among our three brands, we saw, I'd say, some decent results, some good sales days made up with, I'd say, higher average basket with fewer customers. They were qualified them as good sales day with traffic being down. So it's still early to tell. And at this stage, I don't want to use necessarily we're following it closely, but I don't think it still represents potentially what could happen in other markets at this point in time. I think it's just too early.
But I'd say it's been a good level of sales as expected during this period in those stores in Germany. Going to France, we have very little of our distribution is in malls. I'd like Philippe to comment on that. You mentioned malls above 400,000 square meters. I think there's very, very few stores that we have in those malls. One of the key channels we have in France is department stores. So we're with strong partnerships with Le Bon Marché, Galeries Lafayette, and Printemps, of course. Existing stores are a big part of our business as well, and they're mainly outside rather than in malls. And then we have an outlet business on the brick-and-mortar side.
On the CapEx 2020, as we mentioned earlier, we're basically - 40% to LY last year. So we've done some meaningful adjustments, pushing other projects to next year. I think for 2021, it's still a little bit early to tell at this point in time where we're going to set the CapEx level, but obviously with a very selective lens on where we open, particularly the store CapEx. On the non-store CapEx, we will continue to accelerate all of our digital roadmap next year as well. Philippe, did you want to complete anything on that?
No, maybe just to complement. So that means if you remember the CapEx, we were at this high of EUR 70 million in 2019. So that would be around [inaudible] EUR 40 million in 2020.
Okay. Thank you. Maybe just a follow-up on my second question on the malls. Do you have any idea if the department stores like Galeries Lafayette or Le Bon Marché are supposed to be reopened on the 11th of May? Where is the decision in the hands of? Is it the prefect of Paris? Is it the mayor of Paris? Is it the minister? Who decides whether Galeries Lafayette reopens?
Again, I won't substitute myself for giving the answers for all of these partners, but obviously, we're in touch. I'm in touch with them fairly regularly. The plan at this point in time is to open on the 11th of May. There are certain constraints on security, on safety, on counting the number of people in the stores as well. Those are the big issues. How to protect? How to have enough masks for everyone, which we will have, gel, etc., etc., and then limiting the number of people, of the density. There are some guidelines being reviewed at this point in time in terms of density to be able to open. So I think there's still. It's not. I think the intent, I could say at this point, the intent is to open, but I think there's still some way to go. And it's different per country.
As you know, Germany is not allowing any openings of stores larger than 800 square meters at this point in time. That might change. I think the rules and guidelines are different per country. And I think it's still a work in process in the French department stores. But the intention is to try to open on the 11th of May.
Thank you very much.
Okay. Thank you, Daniel. Do we have the next question?
Next question is from the line of Kathryn Parker. Thank you. Please ask your question.
Good morning. Can you hear me okay?
Yes, very well, Kathryn. Thank you.
Great. So my first question was actually a clarification. So on your initial comments in the presentation on SG&A, what proportion of costs did you say could be made variable to reduce? And then my second question is on the gross margin. I was wondering if you anticipate any write-downs of inventory or if you just expect to increase your sales to the outlets and what you think the balance of impact might be between H1 and H2. And then my third question was on digital, specifically in mainland China, and whether the penetration in Q1 was above 40% of sales and also what the penetration of Tmall was within digital sales. Thanks.
Okay. Thank you for asking. Philippe, maybe you want to take the question regarding the breakdown of costs?
Sure. So what we meant is that we can make about 50% of our SG&A variable as we do for the stores. So that's either you have some expenses which are already variable, like the fixed rate, for example, or that's stuff that we are reducing. So this is talking about the compensation freeze, reduction of variable pay, adjustment in organization, and as well, reduction in discretionary spend, as Daniel mentioned, in terms of A&P, T&E, and negotiation with a lot of different service providers and suppliers. So that's over 50%. The gross margin, yeah, in general, there will be some pressure on the gross margin because you could expect the market to be a little bit more promotional when it will restart more significantly. We have done many actions on our inventory with the shift in the collection planning between spring and winter.
We have also adjusted very, very meaningfully our buys for H2 and for the winter 2020 collection. So with this, we feel we are going to manage the bulk of the topic of inventory. So now there could be a little bit of timing where we will have a bit higher inventory in end of H1, and then it should normalize towards H2. So we are very active on all that, looking at option of degradation as well.
Then maybe on the China question on digital and mainland China. So I'll give you a couple of contextual points. So we have for our brands today three sites: Tmall, JD, and our own sites in mainland China. At this point in time, the big traffic driver still is Tmall, which does a meaningful part of the traffic and sales for us. Our own site's developing well, and JD is still early stages of development with JD. So Tmall is still the big traffic driver for us. Penetration, as you can imagine, during the lockdown of the stores did increase. Last year, FYI, we were at about close to a 15% penetration in our e-commerce sales in China as part of total sales. So obviously, that shot up for the first quarter, but I think the number is not as meaningful.
I think we have to look at it when the stores are open at the same time. But the trend is that we expect it to grow, continue to grow faster than the brick-and-mortar sales, and hence, the penetration will likely increase from the point of departure last year of 15%.
Great. Thank you. We have the next question [inaudible].
The next question is from the line of Marielle de la Gueronniere . Thank you. Please ask your question.
Hello. Can you hear me?
Yes. Good morning, Marielle.
Good morning. Just one question. First question on China. In April, you gave some trends regarding stores. Can we consider that the e-commerce sales can help in China in April?
Célia, do you want me to take this?
Yeah. Yes. Go ahead.
Sorry.
I need the permission.
Thank you, Célia. So listen, Marielle, I think if you look at page 10, we give some very specific numbers on Mainland China and total sales. So the trend or the growth in January was 10%. We had started very, very, very strong. February -80%, March -35%. What I can say for April is that the trend continues to improve. So we have a solid improvement in the trend for April. Our conversion rates are increasing, which is good. People coming in the stores. And on the e-commerce channel, I'd say the same comment is the trend that you've seen for Q1 basically is continuing. We're seeing that continuing level of growth in April.
We also see, as Philippe pointed out, there are some cities where we've seen some positive comps versus LY in China in April at all, but some cities like Kunming, like Nanning, Changsha, for example. And we've seen a difference in performance between, I'd say, the southern part of China and northern, where the southern part is showing stronger trends because some of the cities are still in slight confinement mode in the north of China. But again, overall, the picture is we see a meaningful improvement or a solid improvement in the trend coming from February, March, and April is better.
Okay, but it's not yet positive.
I don't think I can comment on that. It's a little early. We have the Tmall going on now, as you know. We have Sandro live stream Monday, which was very successful, by the way. We just got the results yesterday and Maje is today. There's still a lot of things happening in April. We've seen, as I mentioned, some cities turn positive in April, which is encouraging for us.
Okay, and regarding your working capital, what kind of trend can we expect for the full year considering what you are doing on inventories? What is your level of confidence to obtain working capital?
Oh, I see. Working capital. Philippe, I'll let you take that.
Yeah. I would say that we are extremely active in terms of working capital. The main item, obviously, is inventory. As we mentioned, we have adjusted immediately our purchases and very meaningfully versus last year. So that's for sure. So inventory will still show some deterioration as a percentage of sales, but we will mitigate a lot of the negative impacts. W e feel quite confident about that. For the rest, in terms of accounts receivable, everything is going very well so far. So nothing special. And yeah, the rest is fairly technical. So there will be some pressure on the working capital, but we are working a lot to mitigate that, and we will continue to work a lot on that. So we feel we can manage it.
Okay. And maybe one last question regarding e-commerce in the U.S. Do you know how it is for your competitors? Is it the same situation, or?
Listen, I think it is. I think it is. I think it's a little complicated situation in North America for e-commerce at this time. I had a chat with our head of North America and specifically on this issue. We have a lot of very robust, I'd say, roadmap in digital for North America. We've seen some good results just even as of last week. I think it's been in our peer group and overall. If I look at the performance in the segment of accessible luxury, even of luxury throughout the world, throughout regions, I think we've seen all a little bit of trend in North America, I'd say. Yeah, it's something that's shared by our peer group on average.
Okay. Thank you.
Thank you. We have a next question, operator.
Yes. The next question is from the line of Geoffroy Michel. Thank you. Please ask your question.
Hello. I hope you can hear me well. I had two questions, first one on liquidity. Just if you could elaborate, maybe you already did, but on how did you cope with the closing of the Commercial Paper market? And the second one was on inventories. I'll come back to that. Just to know if you could give us some indications on the magnitude or to quantify a bit the kind of effects on inventories that you expect for each one. Thank you. [inaudible]
Okay. Thank you, Geoffroy . Philippe, do you want to take the question?
Sure. So yeah, as I mentioned, so if I take end of Q1 as a reference, we had over EUR 200 million cash. And so this cash is used for two things. One is for the amortization of the outstanding Commercial Paper, and the rest is to manage our cash burn. So that's really the two things that we are managing. And what I would say is that we have what we need to manage these two aspects. W e are taking a cautious approach, which is to say that we consider the Commercial Paper market will be closed for now, and then we'll see if there is some opportunity later on. But we are not planning to use the Commercial Paper market at the moment, and we knew that it's working with this reimbursement. In terms of inventory, well, I'm not going to give you a guidance on inventory.
As I mentioned, we will have inventory a bit higher in June. So we have taken an assumption, which I think is also cautious. With that, everything is working. We are able to face that in terms of working capital, in terms of liquidity. And then we expect the situation to normalize end of the year, meaning that we would have inventory which could be slightly up or similar to last year. That's the idea for end of 2020.
Thank you very much. [inaudible]
Thank you. Operator, do we have some further questions?
No further questions on the phone line, ma'am. Please continue.
Okay. T hank you very much for your intervention today. The next time we will talk will be for the H1 sales publication at the end of July on the 29th. So I wish you a good day, even though we are in a very specific context. Daniel, I don't know if you want to say.
No, just the same, Célia. I think, listen, thanks for all the great questions this morning. And listen, we wish you all very well. So thanks for joining us this morning and wish you a very nice day.
Thank you. Bye-bye.
Thank you, everyone.
Thank you.
Thank you. That has concluded our conference for today. Thank you all for participating. You may all disconnect speakers. Please stand by.