Superdry spins into loss as new management tries to restore sales
Struggling lifestyle-fashion label Superdry has reported a loss of £85.4 million for the year to March, a sharp turnaround in fortune after the £65.3 million profit of the prior year.
The results were heralded by the company in a series of profit warnings and follow turmoil on the company’s board. Founder Julian Dunkerton has retaken the reins of the business and a raft of directors and senior management have left.
James Yacoub, a retail analyst at GlobalData, says the disappointing results have been spurred on by a poor performance in the second half “which Superdry has put down to the unimaginative excuse of a ‘difficult retail climate’”.
“Of course this may have been convincing had competitors experienced similar misfortunes, however this has not been the case for those innovating and who are in tune with customers, with online pureplay Boohoo achieving exponential revenue growth of 47.8 per cent while sports and athleisure retailer JD Sports achieved 49.2 per cent revenue growth over the same financial period,” said Yacoub.
“Superdry is suffering from deep-rooted issues relating to its inability to remain relevant and ultimately differentiate itself from more nimble, innovative and the latest lifestyle brands.”
Although Dunkerton’s return to Superdry will not have an immediate impact on performance, Yacoub says one would hope to see an improvement in results in 12 to 18 months when his influence on product, channels and brand has had a chance to filter through.
Incoming chairman Peter Williams described the Superdry results as “clearly very disappointing”.
“However, everything I have learnt since joining the business in April has reinforced my view that Superdry is a powerful brand with great people across the organisation.
“While we have been clear it is going to take time, I remain convinced that continuing to work closely with Julian and the leadership team, we are building the right plan to deliver long-term sustainable growth for shareholders,” Williams said.
However Yacoub says that while Dunkerton has announced plans to ‘bring back design excellence’, reset store profitability and to build a cohesive team to stabilise the business, these plans are rather vague and have not instilled any real confidence in investors, as Superdry’s share price continues to tumble.
“It is imperative, however, that investors provide Dunkerton with sufficient time to implement his transformation plan, though more detail on product range development and margin control would help alleviate some concerns.”
Yacoub says Superdry must find a way to breathe new life into its brand, it must define and capture its target audience through effective social-media campaigns and ensure that it is resistant to changes in fashion and seasonal trends.
“Ultimately Dunkerton must futureproof the business by expanding its design range to appeal to a wider target segment and also innovate to maintain customer loyalty and increase engagement.”