Store revenues plummet at Superdry, but results boosted by e-commerce sales
Revenues at global fashion brand Superdry declined by more than 23 per cent between April and October last year. Group revenue decreased by £86.4 million to £282.7 million.
The decline reflects the effects of Covid-19, closed stores and social distancing on the Cheltenham headquartered brand's stores. There was better news from its e-commerce performance however, which was up nearly 50 per cent year on year, partially offsetting lost store sales which were down more than 44 per cent.
Group statutory loss after tax for the period was £15.4 million, compared to a £6.5 million loss in the first half of 2020.
The company's liquidity remains strong, with closing net cash position of £34.1 million, £43.4 million better than in the first half of last year, reflecting continued focus on managing cash and costs tightly, driven by rent deferrals and the significant, sustainable reduction in its inventory levels.
Trading continued to be disrupted going into the retailer's third quarter, with further national and regional lockdowns across the UK and Europe, restricting the operations of its store estate. This resulted in 38 per cent of store days lost due to lockdowns in the 11 week period, including the all-important weeks before and after Christmas in several key markets.
In its results, Superdry's directors note that a material uncertainty exists and may cast significant doubt on the Group's ability to continue as a going concern.
Acknowledging the supremely tough times on the high street, Julian Dunkerton, Founder and Chief Executive Officer, looks at the longer term, He said: "Covid-19 has brought substantial challenges to Superdry as with many other brands. 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 per cent 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."
Looking to the future Superdry warned that the continued uncertainty and disruption caused by Covid-19, makes it more difficult than ever to forecast the outturn for the year. It said: "Consequently we recognise the material uncertainty noted in our going concern assessment, and we are not providing formal guidance at this time for FY21 or beyond."
Superdry predicts prolonged store closures and subdued footfall in early 2021 to negatively impact its revenues year-on-year, even after considering the six weeks of lockdown in late FY20. These shortfalls will be partially offset by rent waivers and furlough support.
Given the elevated levels of clearance activity throughout the 2020 calendar year, and as it adopts a more balanced promotional stance in 2021, the retailer predicts that ecommerce growth will decelerate in Q4 21.
It also anticipates wholesale revenues to end the year broadly in line with current market expectations.
Julian added: "We are making great progress with our influencer-led, digital marketing strategy, enabling us to better target new and existing customers. I am particularly excited about our recently announced partnership with Neymar Jr, a globally recognised sports star with over 143 million worldwide social media followers. I am also very proud of how we are embedding sustainability in every part of the business, with responsibly sourced ranges at the heart of our AW20 collection. 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.
"With Silvana Bonello joining our team as Chief Operating Officer, we are well on the way to having the right leadership team in place to see us through the current difficult environment, oversee the delivery of our strategy and return the brand to long-term, sustainable growth once the pandemic recedes."
Superdry's Autumn/Winter 20 brand reset has launched across all its channels, and it says its marketing campaigns are driving record levels of engagement. Sustainability is increasingly being embedded into the brand, with 38 per cent of its Autumn/Winter 20 range revenues from organic cotton, recyclable and low-impact material. All of its Autumn/Winter 20 padded outwear jackets use recycled materials.
As at 9 January net cash was £54.8 million, and its refinanced ABL facility undrawn. Net cash remained positive throughout 2020.
