Superdry sales slide as stores are shuttered

Superdry has announced that its fourth quarter performance was “substantially impacted” by the outbreak of Covid-19, with year-on-year revenue tumbling 36.9% to £118.5m.

Following the closure of all owned stores and most franchise locations, group revenue for the full-year was down 19.1% to £705.5m against the year prior. 

Store revenue was down 22.9% in the full-year, and tumbled 57% in the fourth quarter alone. The group said this was a “consequence” of the return to a full price trading stance, reflected in the full price sales mix increasing to 69% over the full year. 

E-commerce revenues also fell by 8.2% in the full-year results, though in the six weeks ended 7 March, sales “materially improved”, rising 18.8% year-on-year until the outbreak of coronavirus.

Meanwhile, wholesale revenues were down 20.1% in the full-year, and tumbled 35.8% in the last quarter, with the “expected recovery of timing impacts hampered by Covid-19, resulting in suppressed demand and customers’ inability to receive SS20 stock prior to the year-end”.

Nonetheless, the fashion retailer confirmed that shipments are now resuming as lockdown measures begin to ease and franchise stores begin reopening.

Prior to the Covid-19 outbreak, the group said that it was also “encouraged” by its underlying performance, with revenue improving to only be down 1% year-on-year in the six weeks ended 7 March. 

However, in light of the ongoing pandemic and “continuing uncertainty”, the group will delay the announcement of its full year results for 2020, which was originally planned for 9 July. The board has also decided to delay its final dividend in relation to the full-year. 

In efforts to shore up cash amid the crisis, the group revealed that 88% of staff have been furloughed, while board members and directors have taken a 25% pay reduction.

As well as rent deferral and a monthly £2m reduction on overheads, the group confirmed its lenders have agreed to waive its April 2020 fixed charge covenant test. 

Superdry will continue “constructive discussions” with existing lenders and potential new financing providers as it “explores the need for the necessary flexibility and additional liquidity going forward”. 

Julian Dunkerton, CEO of Superdry, said: “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.” 

He added: “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.”