Superdry, the British fashion retailer, has demonstrated “clear indications of brand and financial resurgence” in its recent update on Christmas trading and half-year results. Despite the progress made, the company acknowledges that its revival is an ongoing process, as sales continue to struggle to catch up.

In the 11-week period leading up to January 8, Superdry reported a 19.6% increase in group revenue compared to the previous year. However, this figure was down 11.7% when compared to the same period two years ago. Although store revenue saw an 18.4% rise over the past year, it dropped by 18.8% over the two-year period. E-commerce experienced a decline of 17.6% year-on-year, but showed a modest increase of 0.3% compared to two years ago. While total retail demonstrated a 21.7% year-on-year growth, it still recorded an 11.8% decrease when compared to two years ago. Wholesale experienced a 12.9% increase over the past year, but witnessed a decline of 11.3% compared to the pre-Covid period.

These results are notable considering the lingering effects of the Covid-19 pandemic. Footfall remained subdued compared to pre-pandemic levels, and the emergence of the Omicron variant led to further restrictions across Europe. Despite these challenges, Superdry made the strategic decision to significantly reduce its markdown offers during the Black Friday and post-Christmas sales.

Superdry’s focus on full-price sales has had a significant impact on its performance. The company did not hold end-of-season sales in its stores, resulting in a 4.1 percentage point improvement in gross margin compared to two years ago.

The half-year results also reveal a positive trend in the company’s performance when compared to two years ago. Group revenue for the six-month period amounted to £277.2 million, representing a 1.9% year-on-year decline and a 24.9% decrease compared to two years ago. Despite the ongoing impact of Covid-19 and Superdry’s full-price trading strategy, there has been a consistent improvement throughout the period. The gross margin rate increased to 55.2%, up from 51.7% the previous year and closer to the pre-Covid figure of 56.3%.

On an adjusted basis, Superdry reported a loss before tax of £2.8 million, which is an improvement compared to the £10.6 million loss of the previous year but worse than the £2.3 million loss of two years ago. However, the company’s statutory profit before tax reached £4 million, surpassing the £18.9 million loss of the previous year and the £4.2 million loss pre-Covid.

Julian Dunkerton, CEO of Superdry, expressed his satisfaction with the company’s progress and emphasized the positive signs of brand and financial recovery. He highlighted the increasing sales run-rate and a significant 12 percentage point increase in the retail full-price sales mix, which contributed to a 3.5 percentage point year-on-year growth in group gross margin. The AW21 season particularly stood out for Superdry, with its core category of jackets experiencing a remarkable 40% growth year-on-year. Positive trends were also observed in other categories, especially womenswear, which saw a 4 percentage point increase in mix compared to AW19. The company also noted promising traction among teen consumers for its short order products.

Superdry’s new flagship store on Oxford Street in London, which opened in November, has exceeded expectations in terms of performance. The company is also making significant progress in its digital marketing strategy, as well as its efforts to reinstate consumer interest in the brand. The number of influencers engaged by Superdry has grown sixfold year-on-year, surpassing 2,000 by the end of December. This growth was supported by increased investment in social marketing activities and continual product improvement.

While Superdry acknowledges that there is still work to be done in its turnaround journey, the company remains optimistic about its future prospects. The clear indications of brand and financial recovery, along with the positive performance indicators, suggest that Superdry is on the right track to reclaim its position in the market.

Useful links:
Superdry Plc Official Website
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