Superdry said that the old clothes left over by its former management team are to blame as it was forced to downgrade profits after a poor Christmas showing.
Revenue dropped sharply, by nearly -16% over the 10 weeks to 4 January, the fashion and lifestyle brand said while store sales were particularly hard hit, falling -18.5%.
Despite a strong Black Friday, the period had been tough, Superdry said.
It comes as the business tries to charter a new course after a boardroom battle which saw the former management team replaced as founder Julian Dunkerton had himself re-instated at the helm last Spring.
“Everyone at Superdry continues to work intensively to deliver the turnaround of the business,” said CEO Dunkerton.
“While we have always said it will take time, we continue to make progress in implementing our strategy.”
But having to fight discounts from rivals, the company floundered over the crucial Christmas period. It now expects underlying profit before tax to be between £0 and £10 million.
The business said it was “encouraged” by customer reaction to the clothes ranges the new management team has brought out since stepping up. However, this was not enough to offset the drag of old stock, which it is trying to sell off.
Meanwhile, there were shortages of some of the better-selling ranges.
The full impact of the new lines will be seen when Superdry launches its autumn/winter 2020 range, the company said.
“A key element of this is to focus on and return to full price sales and reduce promotional activity, and we halved the proportion of discounted sales over our peak trading period, benefiting both our margins and the Superdry brand,” Dunkerton said.
“However this adversely affected our sales during the peak trading period given the level of promotional activity in the market.”
Online revenue fell -9.3% while wholesale dipped -16.9% in the 10-week period. The business is expected to present results for the full year in July.