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Losses at Superdry have ballooned as coronavirus-induced lockdowns pummelled revenues, with the clothes retailer expecting “prolonged store closures and subdued footfall” in the coming months.
The company on Tuesday posted a £18.9m loss before tax in the 26 weeks to October, compared with a £4.2m loss in the same period last year.
Retailers with a large number of stores have been hit hard by enforced closures of non-essential retail during the pandemic. Superdry said lockdowns had cost it almost a quarter of trading days in the past six months, with 72 per cent of stores closed as of early January.
Superdry’s revenues dropped 23 per cent to £282.7m in the period, as a 50 per cent jump in online sales failed to offset losses from stores.
Shares in the group fell almost 18 per cent before paring some losses to sit 13 per cent lower at lunchtime in London, with the stock down 48 per cent over the past year.
The pandemic has complicated chief executive Julian Dunkerton’s plans for a turnround at the company he founded. He returned to the helm almost two years ago following a boardroom coup, having quit the company in 2018.
In a sombre assessment of retail’s recovery from coronavirus, Superdry said it expected store footfall to remain low until the first half of 2022. The retailer did not provide formal guidance for next year, citing “material uncertainty” around future trading.
“The brand reset is set back a bit, but not hugely,” Mr Dunkerton told the Financial Times, adding that investors’ reaction was partially due to “a bit of a misunderstanding on our liquidity position”.
Superdry has a net cash position of £55m in January, up from £22m in November, as well as access to £70m in untapped credit facilities.
“The reality is that we are feeling very confident,” Mr Dunkerton added.
A key focus of the company’s turnround plan has been to reduce discounting, something it nevertheless found itself doing last year as the hit from the pandemic threatened cash supplies.
The situation has, however, improved. “At this point we have far more products on full price than a year ago,” Mr Dunkerton said.
Analysts at Investec said they had expected Superdry to post worse results during the lockdown but did not find that reason enough to cheer, saying they did not expect Superdry to break even until 2023.
Superdry’s 2020 autumn and winter collection, the first influenced by new management, had been expected to test demand for the revamped brand. But widespread store closures during the period had overshadowed the rollout leaving “no feel for underlying demand”, the analysts said.
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