Superdry falls to loss in "difficult year"

Superdry has fallen to a £21.7m loss in what co-founder and CEO Julian Dunkerton (pictured above) has described as "difficult" year for the business.

In the 12 months to 29 April, the business achieved sales up 2.1% at £622.5 million while pre-tax was £21.7m versus a profit of £21.6m in the prior year. Statutory loss after tax was £148.1m versus the prior year's profit of £22.4m.

During the period, Stores revenue was up 14.7% as business recovered from COVID in the US and UK, with strong peak holiday sales. E-commerce revenue was up 14.3% due to "good third-party site performance and [the brand's] best Black Friday event".

However wholesale proved a drag on sales and the return to normal levels of rent and business rates (which had been subsidised during COVID) meant that the business entered a loss.

CEO and co-founder Julian Dunkerton said: “This has been a difficult year for the business and the market conditions have been extremely challenging, especially in Wholesale. We’ve looked closely at how we operate and have taken decisive actions to improve our position, rebuild liquidity, and recapitalise our balance sheet, through careful preservation of cash and a re-engineered cost base.

“The good news is that despite the external turbulence, the brand is in sound health and has momentum. Stores and Ecommerce delivered a strong sales performance, and I’m excited by our collections for the Autumn/Winter 23 season. While Wholesale remains very challenging, I believe the new team in place will recover this business in the medium-term. I’m really excited by our new partnership in Asia, finalised after year-end, which not only has helped rebuild our balance sheet but will ensure Superdry can achieve its potential as a truly global brand."

The new financial year has got off to a challenging start with group revenue down 18.4% over Q1, however this was in line with expectations.

First quarter store revenue declined by 3.7% when compared with the same period last year, largely on account of the unseasonable weather, and a later start to its end-of-season sale.

Q1 e-commerce sales declined by 12.6%, also impacted by the later start to sale, as well as "a profit-focused reduction in spend on digital marketing." In total, Retail segment was down 6.6%.

Wholesale revenue was down 50.3% during the Q1 period, which the company said was partly a result of year-on-year timing differences.

"Wholesale production and distribution has long lead times, and it will take some time for the impact of the new leadership in this area and the reversion to an agency model in some major European markets, to be seen in the sales performance," the company said in a statement.

To shore up its position Superdry has embarked on a cost-saving programme and has recently agreed loan facilities with Bantry Bay Capital for up to £80m, and a further £25m facility with Hilco Capital agreed post year end. It also raised £45m from an IP sale and share issue.

Shares in Superdry were temporarily suspended this week due to delays in its auditing process but should resume now its results have been published.