Superdry reported a sharp fall in sales and deeper losses for the full year as Covid-19 lockdown measures put more pressure on the already struggling fashion chain.
Full-year sales fell by nearly a fifth in the year to April and the group reported an underlying loss before tax of £42m, compared with a £38m profit for 2019.
Its share price fell by 13 per cent in early London trading on Monday as it warned that business remained disrupted and said it would not issue a final dividend.
Julian Dunkerton, Superdry’s co-founder and chief executive, returned to the company last year after a boardroom coup and pledged to turn it round, increase choice and cut back on discounting.
But the group said it had offered steeper discounts on its clothing in recent months than a year earlier to help clear excess stock, which piled up when stores were closed during the lockdown.
“We weren’t [discounting] until Covid hit and then we very sensibly looked over our cash,” Mr Dunkerton told the Financial Times.
Superdry said online sales had nearly doubled year-on-year in the first three months and that demand in stores had improved since social-distancing measures were eased. But the company warned that trading remained “disrupted” with “unprecedented levels of uncertainty”.
The retailer known for its colourful clothing was struggling even before the pandemic. In January, it said its annual profit could be wiped out after a disappointing performance over the Christmas trading period.
Mr Dunkerton said the holidays this year would be different as “the product is so much better this year” adding that “the autumn and winter clothes [last year] had nothing to do with me at all”.
However, the group remained “cautious” about the economic recovery and the impact this may have on its turnround plans.
A renewed surge in coronavirus infections across Europe has prompted the UK government to discuss the case for the reintroduction of stricter social-distancing measures, which could affect footfall to retailers, restaurants and bars.
Mr Dunkerton questioned the idea of further lockdowns: “what would be the point of locking down in two weeks if we are just going to go back to where we were?”
“What we need is a proper testing system so that we can take sick people out of circulation,” he said.
Analysts at Investec said Superdry had suffered problems with its strategy and brand for “a number of years”, warning that the company needed a “radical” rethink. They expected Superdry to remain lossmaking throughout the next financial year.
Total revenue for the 52 weeks to April 25 dropped 19.2 per cent to £704.4m. All the group’s stores were closed from March 22 until beyond the end of its financial year.
Including an impairment charge on stores, the statutory loss was £167m, down 87 per cent.
Superdry completed the refinancing of its facilities to an asset-backed lending facility of up to £70m, whose expiry date it extended to January 2023.
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