Superdry, the popular British fashion retailer, has reported a sharp drop in sales as a result of the Covid-19 pandemic’s impact on its physical stores. In a trading update for the first half of the fiscal year ending October 24, sales fell by a significant 23.3%. Although the decline in the second quarter was slightly less severe than in the first, it was still a substantial decrease. Sales in physical stores for the first half plummeted by 44.8%, with the second quarter alone down by 32.1%. Wholesale sales also faced challenges, with a decline of 28.8% in the first half and 28% in the second quarter. However, there was a silver lining for Superdry – its e-commerce sales soared, increasing by 49.8% in the first half and 16.9% in the second quarter.

The company recognizes that its physical stores have been severely impacted by Covid-19 measures, especially in large city center locations. Like-for-like store trading in the last six weeks of the first half was down by an alarming 32.4%, and ongoing social distancing measures continue to affect trade in the UK. However, the decline was partially offset by a stronger performance in Europe, where footfall declines were not as severe. Unfortunately, Superdry now faces further difficulties as of November 5, with 122 stores temporarily closed across England, Wales, France, Belgium, and Ireland.

Despite these challenges, Superdry’s e-commerce channel has thrived. Like-for-like sales were up by an impressive 51.9% in the last six weeks of the first half. The company attributes this success to strong sales on its owned websites, which saw a year-on-year increase of 68.9%. This boost coincided with the launch of Superdry’s new AW20 product line and the clearance of older stock. However, the wholesale channel has faced similar struggles to the physical stores due to Covid-19 restrictions and uncertainty. In the second quarter, performance was further affected by delays in deliveries compared to the previous year.

As part of its turnaround strategy, Superdry aims to move away from promotional pricing. Unfortunately, the Covid-19 pandemic has caused delays in implementing this strategy. The company has had to increase promotional activity to clear excess inventory, leading to a reduction in the retail gross margin. Nevertheless, Superdry remains committed to its brand reset and insists that it is on track despite the disruptions and volatility caused by the pandemic.

With national and regional lockdowns being enforced in the UK and globally, Superdry is focused on maximizing revenues through its e-commerce channel during the crucial Black Friday trading period. The company has implemented both commercial and operational plans to capture the anticipated increase in online demand. CEO Julian Dunkerton acknowledges the challenging conditions but expresses confidence in Superdry’s financial flexibility, as well as its progress with its strategy and brand reset. Dunkerton emphasizes the importance of engaging with customers through social channels and the company’s influencer-led Autumn campaigns.

In conclusion, Superdry has faced a significant decline in sales due to the impact of Covid-19 on its physical stores and wholesale channel. Fortunately, its e-commerce channel has provided some relief by performing well. The company remains focused on implementing its brand reset and is determined to navigate through the uncertainties ahead, ensuring the return of success for both the business and the brand.

Useful links:
1. Superdry official website
2. BBC article on Superdry’s sales decline