Superdry has issued a warning that its sales are expected to continue falling throughout the current financial year, following its decision to withdraw from the London Stock Exchange in a bid to remain solvent.
The fashion brand, headquartered in Cheltenham, opted for delisting earlier this year as part of an aggressive restructuring strategy aimed at ensuring the company's survival.
At the time of delisting, Superdry stated that reducing rents on 39 of its outlets, securing additional funding, and exiting the stock market would aid in reviving the business after several challenging years.
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The retailer made its debut on the London Stock Exchange in 2010 with an initial public offering that valued it at £400m, reports.
Its recovery plan, set to be implemented over a three-year period, involves founder and CEO Julian Dunkerton financing an equity raise of up to £10m
Superdry had been battling to stay afloat for several months, initiating various schemes to cover additional expenses. In October 2023, it entered into a joint venture with Reliance Brands Holding 海角视频 Ltd (RB海角视频) for the sale of its intellectual property in South Asia, marking its latest effort to increase funds.
This move echoed a similar agreement announced by Superdry in March to sell the intellectual property of its Asia Pacific range to South Korean retail group Cowell Fashion Company for $50m (£40m).
Now, Superdry has disclosed that it anticipates its revenue to fall between £350m and £400m for its financial year ending April 2025.
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Recently submitted accounts to Companies House reveal that the company's revenue for the 12 months leading up to 27 April, 2024, amounted to £488.6m, a decrease from the previous year's £622.5m.
The firm's pre-tax loss decreased from £78.5m to £65.2m, while Superdry reduced its workforce from 2,579 to 2,263 employees.
Regarding its wholesale revenue, which fell by 36 per cent to £117m, the company stated: "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 also experienced a 16 per cent drop in retail revenue to £371.6m, primarily due to declining store and online sales. E-commerce revenue saw an 18 per cent decrease to £146m, attributed to "well-documented external and macro-economic factors but also by a profit-focused reduction in spend on digital marketing".
Superdry noted that its store sales dropped by 14 per cent to £225.6m, affected by "unseasonal weather and timing of promotions". The company also acknowledged that both its retail channels were impacted by "heavy discounting from competitors".
Despite the softer sales performance, the company highlighted: "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."
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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".
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."
The company outlined its medium-to-long term ambitions, stating: "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."
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