Superdry sales down as it reveals COVID-19 impact
Superdry group revenue was down 19.1% to £705.5m in FY20 as the impact of the COVID-19 outbreak hit in the final quarter, the company has revealed in a trading update.
Store sales for the year were down 22.9% to £288.3m (with a slump of 57% in Q4), with e-commerce down 8.2% at £149.5m (but up 6.8% in the final quarter) and wholesale down 20.1% to £267.6m (and down 35.8% in Q4). However, the company pointed out that e-commerce performance in the six weeks to 7 March had materially improved, growing 18.8% year on year until the outbreak of COVID-19.
Superdry began closing its stores in Italy on 11 March and by 18 March, when it last issued a trading update, 78 out of its 241 stores were closed. By 22 March all stores across Europe, USA and UK had been closed.
The brand continues to operate online with appropriate health and safety and social distancing measures in place and has revealed that e-commerce revenues nearly doubled in the last 4 weeks to approximately £3.7m per week versus the average prior to complete lockdown.
Some 88% of its workforce has been furloughed and its directors have all taken a 25% pay cut for a minimum of three months from 1 April and the company will not be operating a bonus scheme for Executive Directors or the wider Executive Committee in FY21 and no annual bonus is payable for Executive Directors in FY20.
These measures generate a cost saving of £4m each month while the stores remain closed. In addition it has extended payment terms, increased discounts and substantially rebalanced and rescheduled stock intake, reducing the number of units of future buys by 20%, and has secured rent deferrals saving £20m. The Government-backed business rates holiday has led to a saving pf £16m.
Superdry has been gradually re-opening some stores in accordance with Government guidelines in various market. Controlled openings of German, Swedish and Danish stores have taken place with 48 stores now re-opened and a further 130 European stores expected to re-open in the coming weeks.
CEO Julian Dunkerton said: "Our first priority through the pandemic has been supporting our colleagues and communities through what is a very uncertain time. We are proud to have supported the NHS and other key workers close to our Gloucestershire headquarters, for instance through donating 300,000 items of vital PPE to local care homes.
"As with all retailers, the Covid-19 pandemic has caused major disruption to our business operations and supply chain. I am pleased with the accelerating shift in sales to online, and we've seen a particularly good performance from our women's ranges which, for the first time ever, are accounting for around half our sales. Clearly however, the closure of all our stores has had a major impact. We are taking all practical steps to preserve cash, looking carefully at all areas of the business and working to secure additional liquidity and financial flexibility.
"We continue to work hard so that the business can emerge stronger from this extraordinary period. It will take time to return to normality, for now we remain open for business online through superdry.com, our stores in Europe have begun to reopen and I am excited by our new ranges for the Autumn/Winter season."
The company confirmed that its wholesale orders for AW20 had mostly been reconfirmed.