As retail across Europe goes into melt-down, global retailer Superdry, which has its headquarters in Cheltenham, says it is facing up to the unprecedented challenges arising from COVID-19, but warns that won’t meet the guidance given in January 2020.
Prior to the global outbreak of coronavirus, its store estate was forecast to generate between £5-6 million in sales per week.
Currently, as at today 78 stores across Europe are affected by government mandated closures, accounting for the majority of its European store estate which contributes around 40 per cent of weekly sales forecasts.
While in the UK and the US, stores have so far remained open, but footfall has been significantly impacted, reducing on average 25 per cent week on week, as governments and customers take increasing measures to contain the spread of the virus.
Given the performance to date, Superdry says it does not expect the decline in sales from our retail stores to be fully mitigated by sales through its Ecommerce channel, which remains fully open for business. “Whilst we are also pursuing cost saving measures across the business, we do not expect these to be sufficient to offset the sales decline,” said the company.
However, the company says it has a strong position of £47 million net cash on its balance sheet. Also, its’ working capital performance to date has been better than forecasts, and the Board is taking sensible measures to preserve cash, including negotiations with landlords regarding store rental relief, postponement of capital expenditure plans, and potential changes to the timing and structure of the future season stock buy. In addition it is talking to its existing lending group to provide additional flexibility and liquidity to support Superdry through this period of uncertainty.
Julian Dunkerton, Chief Executive Officer, said: “Along with everyone else, Superdry is experiencing major disruption to our business operations and recovery as we seek to protect our staff and customers from COVID-19.
“We are taking mitigating action wherever we can but the situation is very fluid and uncertain, and we are working to put in place additional financing to secure our recovery. We also welcome the measures announced by the Chancellor yesterday to support UK businesses. The safety of our staff and customers remains our number one priority and we continue to take all appropriate action in line with local government advice. Together, we’re going to make our way through this unprecedented challenge, and I’m confident we can reset the brand and deliver on our transformation plans.”