Superdry swings to £18.9m H1 loss

Superdry has reported an £18.9m loss for the first half of the year, as the company also warned about its ability to continue as a going concern due to the impact of Covid-19 and lockdown restrictions.

For the 26-week period to 24 October 2020, it revealed total group revenue declined 23.4% to £282.7m from £369.1m the previous year, with 23% of owned store trading days lost due to lockdown restrictions and the continued impact of social distancing on footfall.

However, e-commerce performance increased 49.8% year on year which the group claimed was partially offset by the closure of stores which encouraged consumers to move online, accounting for 50% of retail revenue for the recorded period.

Liquidity for the company reportedly remained strong, with a closing net cash position for 2020 of £34.1m from £9.3m for the same period in 2019.

The group said the liquidity position was due to their “continued focus” on managing cash and costs tightly, driven by rent deferrals and the significant, sustainable reduction in inventory levels which were 13.7% less at £26.5m year on year.

However, the group’s directors added that a “material uncertainty” exists and still may cast “significant doubt on the group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business”.

Julian Dunkerton, founder and CEO for Superdry, said: “Covid-19 has brought substantial challenges to Superdry as with many other brands, and this has continued through the first half and into the second with renewed lockdowns in our key markets. Covid-19 has exacerbated this risk and could impact our ability to trade, lead to regulatory scrutiny and fines and cause damage to the brand, e.g. loss of customer trust.”

“While revenue and underlying profit have been impacted by the external conditions, the brand has continued to focus on the reset, however, with over 70% of stores currently closed and having to shut a significant number over peak, it will take time to see the benefits of all our hard work flow through to the results.”

He added: “We are making great progress with our influencer-led, digital marketing strategy, enabling us to better target new and existing customers. I believe sustainability is becoming critically important to our customers and I’m committed to Superdry becoming one of the leading global sustainable fashion brands.”