Superdry has announced significant losses after deferring its results announcement.
U.K.-based fashion retailer Superdry has announced a near $190 million loss for the financial year after delaying its annual report and requesting the temporary suspension of trading in its shares earlier this week.
The company highlighted the cost of living crisis as impacting its peformance as it reported an $186.5 million loss for the 52 weeks to April 29, compared with a $28.2 million post-tax profit the year prior.
The company confirmed that it had agreed post year-end financing from Hilco with a $31.5 million loan agreed at 10.5% plus the Bank of England base rate. While Superdry said that it had not yet drawn down the facility, the fresh financing may be required to cover running costs going forwards.
Superdry also has a debt facility of just over $100 million, agreed previously with Bantry Bay Capital.
Shares are expected to resume trading next week and Julian Dunkerton, the colorful co-founder of Superdry, admitted in a statement: “This has been a difficult year for the business and the market conditions have been extremely challenging, especially in wholesale. We’ve looked closely at how we operate and have taken decisive actions to improve our position, rebuild liquidity, and recapitalize our balance sheet, through careful preservation of cash and a re-engineered cost base.”
He said that the “good news” was that despite external turbulence, the brand remains in “sound health and has momentum”.
He said that although wholesale remained very challenging, he believed the new team in place will recover this business in the medium-term.
Superdry Sells Asian IP
Superdry has already shed over $44 million of costs this year, including the sale to South Korea’s Cowell Fashion Company of its IP in some Asia Pacific markets for $50 million.
“I’m really excited by our new partnership in Asia, finalized after year-end, which not only has helped rebuild our balance sheet but will ensure Superdry can achieve its potential as a truly global brand,” Dunkerton said.
“I’m not expecting the consumer environment to become any easier soon. However, the actions we have taken and continue to take to ensure the health of the business, give me more confidence as we look into the future.”
Challenging market conditions mean Superdry expects another tough year. Photographer: Simon … [+]
Group revenue rose 2.1% to $834.5 million, with “robust retail growth” of 14.6% offset by a 19.1% decline in wholesale as it continued to be impacted by a more cautious outlook from partners.
Stores revenue rose 14.7%, and e-commerce revenue increased 14.3%. Gross margin was down 3.2% to 52.8% due to continued clearance of aged stock, though 62% of garments contain sustainably sourced materials, ahead of Superdry’s 47% target.
Revenues Down, Wholesale Exit
In the first financial quarter to the end of July, grroup revenue was down 18.4% over the period but “ broadly in line with our expectations” amid margin improvement.
Store revenue declined by 3.7% when compared with the same period last year, ecommerce sales declined by 12.6%, while wholesale revenue was down 50.3%, partly as a result of year-on-year timing differences, the company said.
Adjusting for these, the underlying performance is closer to 30% down, which is closer to expectations and reflects changes including the decision to exit its U.S. wholesale operation.
The company reported an exceptional charge of $54 million as it reevaluated previous store growth assumptions and added that it would continue to focus on cost savings and margin improvements.
At suspension, Superdry’s share price stood at 70.7c, down nearly 60% on the start of the year after a brief stock price spike in mid-January.
