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Superdry issues profit warning as trading ‘continues to be weak’

Superdry has said its “trading performance continues to be weak” as the clothing retailer issued another profit warning in its trading update for the 13-week period to 27 April 2019.

Its wholesale and e-commerce revenues performed the worst in Q4 with declines of 9.3% and 3.9% respectively. Year-on-year wholesale revenue saw a 3.6% increase to £335m while its e-commerce business was up 1.6% to £163.7m.

The poor wholesale results were said to be due to returns, in-season orders falling below expectations and decisions not to ship to customers that had reached their credit limits. Online revenue was said to be affected by discounting.

Superdry said because of the performance in these two areas, it expected its FY19 underlying profit before tax to be lower than market expectations. This is the third profit warning the retailer has issued in the past 12 months.

Store performance improved during the period, growing 2.2% but down 3.7% to £373m year-on-year.

The retailer has seen some disputes recently, with its founder Julian Dunkerton returning at the beginning of April in an effort to revive the company after criticising its strategy following its profit warning in October. The entire board – who said his return would be “extremely damaging” – consequently resigned as he narrowly won the support of 51.15% of the shareholders.

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 e-commerce 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, chairman, 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.”

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