Superdry, the British clothing retailer, has reported a significant decline in sales for the first half of its financial year, mainly due to the impact of lockdown measures implemented worldwide. In the six months leading up to October 2020, total revenues fell by 23.4%, coinciding with a 23% reduction in trading days for the company’s owned stores. Consequently, physical store sales dropped by 44.8%. However, Superdry experienced a surge in its e-commerce business, with online sales increasing by 49.8% year-on-year and accounting for 50% of retail revenue in the first half.

The company has refrained from providing any full-year guidance and has expressed concerns about its ability to continue operating as a going concern. Nevertheless, Superdry maintains a strong liquidity position. The challenging trading conditions have persisted into the second half of the year, with revenues declining by 27.2% in the 11 weeks leading up to January 9. Store sales were particularly affected, dropping by 52.1%. However, the reliance on e-commerce proved beneficial, with online sales increasing by 13.2%, and owned sites experiencing a robust growth rate of 25.7%.

Superdry’s decision to focus on selling full-priced products rather than offering excessive promotions during this challenging period has contributed to an improvement in gross profit and contribution. The company witnessed strong pre-Christmas trading, particularly on its owned sites in November and December. While wholesale orders declined by 23%, attributed to cautious forward orders for AW20 and the impact of COVID-19, in-season orders from online wholesale customers increased by 29%.

These financial results for the first half of the year demonstrate the ongoing impact of the COVID-19 crisis on Superdry’s recovery plan. The company has faced various challenges in recent years, including declining performance and changes in leadership. Co-founder Julian Dunkerton has assumed responsibility for the turnaround efforts and has been navigating the additional difficulties posed by the pandemic. Despite these obstacles, Superdry has made progress in its brand reset and marketing campaigns, leading to record levels of engagement. The company has also emphasized its commitment to sustainability, with a significant portion of its AW20 revenues generated from organic cotton, recyclable materials, and products with low environmental impact.

Dunkerton acknowledged the impact of external conditions on the company’s revenue and underlying profit but expressed confidence in Superdry’s reset strategy. He emphasized the importance of ongoing digital marketing initiatives, such as the partnership with globally recognized sports star Neymar Jr. Additionally, the recent appointment of Silvana Bonello as Chief Operating Officer strengthens the leadership team.

While the current environment remains challenging, Superdry is focused on achieving long-term, sustainable growth and aims to capitalize on the recovery once the pandemic subsides.

Useful links:
1. Superdry Official Website
2. BBC article on Superdry’s financial decline