Superdry turnaround plan disrupted by Covid-19 as losses reach £10m

Superdry Julian Dunkerton
The company said the revenue decline reflected the impact of the pandemic
// Superdry posts underlying loss before tax of £10.6m in the 26 weeks to October 24
// Group revenue fell by 23.4% to £282.7m during the period
// As of January 9, 173 stores are temporarily closed, representing 72% of its portfolio

Superdry has reported a drop in sales and profits as the Covid-19 pandemic continued to slow down trading.

The fashion retailer recorded an underlying loss before tax of £10.6 million in the 26 weeks to October 24, compared with a £2.3 million loss in the same period the previous year.

Group revenue fell by 23.4 per cent to £282.7 million, down from £369.1 million in the same period in 2019.

READ MORE: What’s next for Superdry now that Julian Dunkerton has cemented his return?

Superdry founder and chief executive Julian Dunkerton said progress was being made, but the closure of stores during lockdown means it will ”take time” to bear fruit.

The company said the revenue decline reflected the impact of the pandemic; 23 per cent of owned-store trading days had been lost under lockdown restrictions and social-distancing measures had reduced footfall.

However, online sales were up 49.8 per cent year on year, and partially offset lost store sales, which were down 44.8 per cent.

“Covid-19 has brought substantial challenges to Superdry, as with many other brands, and this has continued through the first half and into the second with renewed lockdowns in our key markets,” Dunkerton said.

“While revenue and underlying profit have been impacted by the external conditions, the brand has continued to focus on the reset.

“However, with more than 70 per cent of stores currently closed and having to shut a significant number over peak, it will take time to see the benefits of all our hard work flow through to the results.

“We are making great progress with our influencer-led, digital marketing strategy, enabling us to better target new and existing customers.

“I am particularly excited about our recently announced partnership with Brazilian footballer Neymar Jr – a globally recognised sports star with more than 143 million worldwide social media followers.

“I am also very proud of how we are embedding sustainability in every part of the business, with responsibly sourced ranges at the heart of our AW20 collection.

“I believe sustainability is becoming critically important to our customers and I’m committed to Superdry becoming one of the leading global sustainable fashion brands.

“With Silvana Bonello joining our team as chief operating officer, we are well on the way to having the right leadership team in place to see us through the current difficult environment, oversee the delivery of our strategy and return the brand to long-term, sustainable growth once the pandemic recedes.”

Furthermore, trading continued to be disrupted going into its third quarter, with further national and regional lockdowns across the UK and Europe restricting the operations of its store estate.

This has resulted in 38 per cent store days lost due to lockdowns in the 11 weeks to January 9, including the weeks before and after Christmas in several key markets.

As of January 9, 173 stores are temporarily closed, representing 72 per cent of its portfolio.

Ecommerce sales were up 13.2 per cent for the period, helping to offset some of the lost store sales, with the strongest performance being seen on its owned sites which were up 25.7 per cent year-on-year.

Meanwhile, its wholesale performance ended the 11 week period down 23.0 per cent year-on-year as Superdry continued to face the same Covid-19-related headwinds as its store estate.

Superdry said it faces “continued uncertainty and disruption” caused by Covid-19, including the impact from sudden and protracted store closures.

The retailer said it recognises the material uncertainty noted in its concern assessment, and it is not providing formal guidance at this time.

It expects prolonged store closures and subdued footfall in early 2021 to negatively impact revenues year-on-year, even after considering the six weeks of lockdown in late FY20.

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