Superdry has warned its sales will continue to fall significantly during its current financial year after quitting the London Stock Exchange in an attempt to stay afloat.
The Cheltenham-headquartered fashion brand delisted earlier this year as part of a radical restructuring plan to keep the company trading.
At the time, the company said that cutting rents on 39 of its stores, raising more funds and leaving the stock market would help bring the business back to life after a torrid few years.
The retailer listed in London in 2010 in an initial public offering valuing it at £400m.
Its turn around plan, which is to be carried out over three years, includes founder and chief executive Julian Dunkerton funding an equity raise of up to £10m.
In October 2023, it signed a joint venture with Reliance Brands Holding UK Ltd (RBUK) for the sale of its intellectual property in South Asia, in its latest bid to boost funds.
That mirrored an agreement announced by Superdry in March to sell the intellectual property of its Asia Pacific offering to South Korean retail group Cowell Fashion Company for $50m (£40m).
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Superdry sales in free fall as loss continues
Now, Superdry has revealed it expects its revenue to land between £350m and £400m for its year to the end of April 2025.
Newly-filed accounts with Companies House show that the firm’s revenue totalled £488.6m in the 12 months to 27 April, 2024, down from the £622.5m it posted in the year before that.
Its pre-tax loss went from £78.5m to £65.2m while Superdry cut its headcount from 2,579 to 2,263.
On its wholesale revenue falling by 36 per cent to £117m, the business said: “Whilst to some extent this was expected due to strategic decisions taken by the business, the decline is also reflective of the continued underperformance of the channel and the challenges we have faced in trying to restructure that segment to deliver growth.”
The brand’s retail revenue also dropped by 16 per cent to £371.6m mainly because of falling store and online sales.
E-commerce revenue was down 18 per cent at £146m because of “well-documented external and macro-economic factors but also by a profit-focused reduction in spend on digital marketing”.
Superdry added that its store sales fell by 14 per cent to £225.6m after being impacted by “unseasonal weather and timing of promotions”.
The company also said that both its retail channels were hit by “heavy discounting from competitors”.
The business added: “Notwithstanding the softer sales performance, a significant success of the period has been the steps taken to reduce costs.
“The directors and wider management team have placed great emphasis on the delivery of our cost efficiency programme, with in excess of £40m of savings realised within the year.
“This has resulted in significant reductions across our selling and distribution and central costs, further validating our ongoing efforts to right-size our operating cost base.
“Continuing to bring down costs remains an area of ongoing prioritisation for the group.”
‘Difficult year’ for fashion brand
A statement signed off by the board said: “This has been a difficult period for Superdry and our challenges have been well documented.
“Despite the progress made on our cost reduction initiatives, and steps taken to create an operating model suitable for the needs of the organisation over the longer term, the weaker-than-expected financial performance necessitated further action in the form of the restructuring, equity raise and delisting.
“Without the implementation of these measures, and in particular the restructuring plan, it was the view of the directors that the group, and other companies within the group, would have needed to enter administration, or an equivalent insolvency process”.
Label braced for more ‘volatility’
On its outlook, Superdry said: “Despite the challenging market conditions, we are focused on enacting our restructuring and turnaround plan, leveraging our brand strength and enhancing our digital presence to secure our long-term future and return the business to profitability.
“The restructuring efforts are designed to deliver a viable and sustainable future, whereby right-sizing the cost base provides a platform for future growth.”
It added: “On a medium-to-long term view, whilst recognising that there is a complex pathway in the interim to navigate, the group is targeting revenue of between £350m and £400m, a gross margin slightly ahead of current levels and mid to high-single digit EBITDA margin (on a pre-IFRS 16 basis).
“More immediately, we continue to anticipate volatility in the consumer retail market, influenced by global economic uncertainties and shifting consumer trends.
“We are mindful of these external and macro factors as we expect profitability to continue to be impacted by weaker trading.
“As a management team, we continue to focus on the delivery of our restructuring program and further opportunities to reduce the fixed cost base of the business.”