London-listed fashion brand Superdry has reported a 23.3% decline in revenue in its half-year report, but said it still plans to plough on with a brand reset.
Superdry said the fall reflected the challenging trading environment as a result of continued disruption from Covid-19.
However, the firm addd that the decline was partially offset by a strong ecommerce performance.
Superdry hit by COVID
Stores continue to be impacted by Covid-related measures suppressing footfall, particularly in large city centre locations.
Like-for-like store trading in the last six weeks of the first half was down 32.4%, with UK trade impacted by continued social distancing measures, partially offset by stronger performance in Europe where footfall declines have been less severe.
As at 5 November, 122 stores are now temporarily closed across England, Wales, France, Belgium and Ireland, with 117 stores still open and trading.
Ecommerce is performing well and strengthened through the second quarter, with like-for-like sales up 51.9% in the last six weeksof the first half of the year.
The improvement was driven by owned site sales, which increased 68.9% year-on-year coinciding with the launch of our new AW20 product and the targeted clearance of aged stock.
Superdry said that in response to Covid-19 it has increased promotional activity to clear excess inventory, reducing full price mix and Retail gross margin in the first half.
This has been partially offset by the continued focus on both cost management and the cash preservation actions beginning in late FY20. Given the continuing disruption, we expect these margin dynamics to continue for the remainder of FY21.
The brand reset remains on track, despite the current unprecedented levels of disruption and volatility, the firm said.
With national and regional lockdowns in the UK and internationally restricting the operations of its store estate, it is now focused on maximising revenues over the Black Friday trading period from in online operations.
“We have in place commercial and operational plans to capture the expected elevated demand online across this important period”, the firm said.
“We are managing cash and costs tightly as we did during the initial lockdown, continuing to drive our strong liquidity position.
“At 3 November we have a net cash balance of £22.2m (2019: £(16.4)m) as well as access to our recently refinanced and currently undrawn borrowing facilities.
Julian Dunkerton, Chief Executive Officer, said: “Covid-19 continues to disrupt our store and wholesale channels, but this is being partially mitigated by strong sales through our Ecommerce operations.
“This has been an important period for Superdry, with the launch of our full Autumn/Winter 20 ranges and a true focus on using our social channels to reach our customers and bring our brand reset to life.
“This activity is delivering record levels of engagement through our influencer-led Autumn campaigns, and we will focus our energies in this area over the coming months led by our new Chief Marketing Officer, Justin Lodge.
“I am particularly proud of our new sustainable ranges, a key step towards our goal of becoming one of the most sustainable clothing brands in the world.
“The external outlook is very uncertain. However, we have financial flexibility and are making good progress with our strategy and brand reset.
“We are determined to do the right thing by all our stakeholders – including colleagues, our retail and wholesale customers and investors – to ensure the business and brand returns to success.”