Superdry Co-Founder’s Turnaround Efforts Are Hit by Pandemic

(Bloomberg) -- Superdry Plc co-founder Julian Dunkerton will have to wait to see whether his turnaround plan is working, as the U.K apparel chain was hit hard by the pandemic.

• The retailer, known for outerwear emblazoned with Japanese characters, lost about 42 million pounds ($54 million) on an underlying basis in the year through April, compared with a profit of 38 million the prior year. Write-downs related to its real estate holdings contributed to the shortfall.
• Superdry said business in the current year is improving, with online sales nearly doubling year-on-year in the first quarter, but said there is a “material uncertainty” over the outlook.

Key Insights

• Dunkerton, who returned to run the brand last year after a boardroom battle, wants to reduce discounting and freshen Superdry’s designs. The autumn and winter range is the first collection under his full control since he returned.
• There’s a downside to the move away from discounting -- the company cited that as a reason why total revenue fell about 19% last year.
• In August, Superdry secured new lending and extended payment terms in a move to give it more time to carry out its turnaround.

Market Reaction

• Shares in Superdry fell as much as 7.8% early Monday in London. They’re down more than 70% since the start of the year.

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• Read the full statement here.

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