Superdry warns on profit due to “challenging” trading environment
The Superdry fashion brand has warned on profit after a “challenging” first half of trading.
In the six months to 28 October, retail sales fell by 13.1% year-on-year due to unseasonably mild autumn weather delaying customers’ purchases of its autumn/winter collections online and in its stores. Trading was also impacted by a later start to its end-of-season summer sale.
Meanwhile, sales in Superdry’s wholesale channel were down 41.1% which the retailer attributed to its decision to exit its US wholesale operation, timing differences, and the underperformance of the channel.
Superdry said the more seasonal weather seen recently in the UK and Europe, along with longstanding strength in outerwear, has led to a pick-up in sales. However, sales in the six weeks to 10 December were down by around 7% on a like-for-like basis.
During the period, action was taken to support the retailer’s balance sheet with the signing of a joint venture agreement with Reliance Brands for the sale of Superdry’s intellectual property assets in three South Asian countries. In addition, a secondary lending facility of up to £25 million was agreed with Hilco Capital to provide the retailer with improved liquidity to help with the implementation of its turnaround plan and cost efficiency programme.
Julian Dunkerton, founder and chief executive of Superdry, said: “The unseasonal weather through the early autumn led to a delayed uptake of our autumn/winter range and this impacted sales in the first half of the year.
“Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance.
“The operational progress we have made in the first half has been more encouraging with the IP sale for the South Asian region and strong progress on our cost efficiency programme.”
Superdry said its full year profits are now expected to reflect the weaker trading seen to date. The retailer will give a further update in its interim results in January.