Superdry mulls financing options as coronavirus hits sales

Superdry mulls financing options as coronavirus hits sales
Superdry said it would not pay a final dividend for its 2019/20 year.
// Superdry reports 19.1% slump in full-year sales to £705.5m, exacerbated by the coronavirus pandemic
// Results were compounded by a 57% plunge in stores sales in its fourth quarter due to the lockdown
// Superdry is in talks with its lenders and potential new financing providers regarding additional liquidity

Superdry has revealed a slump in full-year sales, which was exacerbated by the coronavirus pandemic and a plunge in quarterly store sales due to the lockdown.

The fashion retailer said full-year dropped by 19.1 per cent to £705.5m, driven by a 37 per cent in the last quarter when the pandemic struck and forced the closure of its store estate worldwide.

As a result, Superdry said it would not pay a final dividend for its 2019/20 year.


In the fourth quarter alone, the retaiker’s group revenue fell to £118.5 million compared to £187.8 million in the same period last year.

Superdry said its full-year bricks-and-mortar sales declined 22.9 per to £288.3 million, but in the fourth quarter it plunged by 57 per cent.

Meanwhile, ecommerce sales declined 8.2 per cent in the 2020 financial year, but they were up 6.8 per cent in the fourth quarter amid a surge in online shopping with customers forced to stay at home during the lockdown.

On the other hand, wholesale revenues were down 20.1 per cent for the year, and 35.8 per cent in the fourth quarter alone.

Superdry highlighted that its overall sales performance in the six weeks to March 7 – before the pandemic escalated – materially improved compared to the same period last year, when the retailer was embroiled in a boardroom struggle amid stagnating sales.

While online sales grew 18.8 per cent year-on-year until the outbreak of Covid-19, Superdry said weekly ecommerce sales have been up 100 per cent year-on-year over the last four weeks due to the lockdown.

To preserve cash in the crisis, Superdry furloughed 88 per cent of its staff and sought government job retention support in its markets.

It has also reduced future stock intake by 20 per cent, secured three-month rent deferrals, and cut capital expenditure.

Senior directors took 25 per cent pay cut and no bonuses will be paid for 2019/20 and 2020/21.

However, the retailer said shipments are now resuming as lockdown measures ease in some parts of the world and its franchise stores begin reopening.

Superdry had £39.8 million of net cash as of May 5, and said banks waived an April 2020 fixed charge covenant test.

It also confirmed it was in talks with its lenders and potential new financing providers regarding additional liquidity.

”Our first priority through the pandemic has been supporting our colleagues and communities through what is a very uncertain time,” Superdry chief executive Julian Dunkerton said.

“We are proud to have supported the NHS and other key workers close to our Gloucestershire headquarters, for instance through donating 300,000 items of vital PPE to local care homes.

“As with all retailers, the Covid-19 pandemic has caused major disruption to our business operations and supply chain.

“I am pleased with the accelerating shift in sales to online, and we’ve seen a particularly good performance from our women’s ranges which, for the first time ever, are accounting for around half our sales.

“Clearly however, the closure of all our stores has had a major impact. We are taking all practical steps to preserve cash, looking carefully at all areas of the business and working to secure additional liquidity and financial flexibility.

”We continue to work hard so that the business can emerge stronger from this extraordinary period.

“It will take time to return to normality, for now we remain open for business online through, our stores in Europe have begun to reopen and I am excited by our new ranges for the autumn/winter season.”

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