Superdry reports weak trading, but with founder back in charge, company is optimistic

Superdry

Superdry, the Cheltenham-headquartered global fashion business which hit the headlines last month after founder Julian Dunkerton was sensationally re-elected to the board, has reported continued weak trading.

While global brand revenues are up 3.6 per cent over the full year, to £1,736.1 million, the company experienced poor wholesale and ecommerce performance over the last quarter.

As a result, Superdry has issued a profit warning, but also said that following the substantial management changes on April 2, “initial actions to stabilise performance and improve the long-term prospects of the Company already being implemented.”

The company reported ecommerce revenue up 1.6 per cent year-on-year to £163.7 million but reportedQuarter 4 revenue down 3.9 per cent.  Performance was impacted by the reduction of year-on-year discounting, including the removal of planned promotional activity at the end of Quarter 4.

Store performance improved in Quarter 4, growing 2.2 per cent, but down 3.7 per cent to £373 million year-on-year.

The company reported that its comprehensive programme to deliver £50m+ gross cost savings by FY22 is continuing but primarily as a result of the weak wholesale and ecommerce performance, along with other measures to deliver the new operational strategy, it now expect sFY19 underlying profit before tax to be lower than the current range3 of market expectations.  A further detailed update will be provided at the full year results announcement on 4 July 2019.

Julian Dunkerton, Interim Chief Executive Officer, said: “I am very excited about being back in the business. There’s a lot to do, but after five weeks, I am more confident than ever that we can restore Superdry to being the design-led business with strong brand identity I know it can be. My first priority has been to stabilise the situation, and all of us in the business are putting all our energy into getting the product ranges right and improving the ecommerce proposition, which are two important steps towards addressing Superdry’s recent weak performance. The impact of the changes we are making will take time to come through in the numbers but I’m confident we are heading in the right direction.”

Peter Williams who took over as chairman from Peter Bamford in April said: “I’m delighted to have joined Superdry. This is a fantastic British brand, and I firmly believe that with the plans Julian is putting in place it will be a great success story once again. Today’s statement shows the scale of the challenge ahead of us.  The Company’s financial performance won’t be turned around overnight, but we know what we need to do, and we are wasting no time in addressing the challenges which the business faces. This includes ensuring the correct corporate governance structure and Board is in place to guide the business going forward. I believe that we are doing the right things to get the business back on top form and delivering long-term sustainable growth for shareholders.”