The ailing British clothing retailer Superdry Plc was able to increase its consolidated sales in the past 2022/23 financial year (as of April 29, 2023) by 2.1 percent to 622.5 million pounds (around 727 million euros). Sales in stationary retail and in e-commerce each rose by more than 14 percent, while sales in wholesale fell by 19.1 percent. According to the company, the reason for this is the continued cautious attitude of trading partners.
The slow recovery in wholesale and the return to normal rental and business charges impacted profitability, resulting in an adjusted pre-tax loss of £21.7m (around €25.4m).
Q1: Significant loss of sales, abandonment of the wholesale business in the USA
There were no signs of an improvement in the situation in the first quarter of 2023. The group’s sales fell by 18.4 percent during this period, “but overall performance is broadly in line with our expectations as trading at MSRP and the cost-efficiency program result in margin improvement,” according to the company.
Sales in stores fell by 3.7 percent in the first quarter compared to the same period last year, which was mainly due to the bad weather and a later start of the end-of-season sale. E-commerce sales also shrank: Overall, they fell by 12.6 percent in the first quarter, which is also a consequence of the later sales and is attributed to a profit-oriented reduction in digital marketing spending.
Wholesale sales fell 50.3 percent, partly due to timing shifts compared to last year. In response to this development, Superdry decided to exit the US wholesale business.
Julian Dunkerton, Founder and Chief Executive Officer, said: “This has been a difficult year for the company and market conditions have been extremely challenging, particularly in wholesale.” Adding: “The good news is that despite the external turmoil in is in a healthy state and exhibiting positive dynamics. The stores and e-commerce have delivered strong sales performance.”
Outlook: No significant growth expected
For the year as a whole, Superdry does not expect significant sales growth as the company initially wants to focus on cost savings and margin improvements. The £35m cost savings program announced earlier this year is expected to be fully implemented during FY2024.
The fashion retailer only obtained additional funds at the beginning of August and agreed a new credit line with a total volume of up to 25 million pounds sterling (29 million euros) with the investment company Hilco Capital Limited.