Superdry chief financial officer Shaun Wills has said the retailer cannot afford to get its product wrong as it enters the autumn/winter season, after it posted an annual loss of £148.1m.
Superdry reported the pre-tax loss for the 52 weeks to April 29, 2023, in comparison to £22.4m pre-tax profit for the previous year.
The fashion retailer also posted an adjusted loss of £21.7m for the period, down from an adjusted pre-tax profit of £21.6m in the 2022 financial year.
Following the trading update to the London Stock Exchange on Friday, Wills told Retail Week the retailer’s turnaround plan has been impacted by various challenges but emphasised his confidence in the future of the business if it can get the product right and resonate with shoppers.
He said: “The wholesale business has had some real challenges, some self-inflicted and some market structural, so we have had to adapt as we’ve gone along. We are looking to get our business back to breakeven by the end of this year and then start to generate profit in the following year. We are doing that by doing things within our control, including growing the gross margin and controlling costs, rather than relying on topline sales growth.”
Sales were up 2% year on year from £609.6m to £622.5m, with “robust retail growth” of 14.6% offset by a 19.1% drop in wholesale.
“If you look at our sales growth last year, wholesale did drag the business down but we are up double-digit across both our stores and our ecommerce, so I think when we get our product right and it resonates, it is absolutely there to be had,” Wills said.
“To actually do higher numbers than you’ve ever done in your history coming out of a Covid era – and we are exposed to a lot of European markets, more than a lot of UK retailers are and the Covid recovery there was slower – means we are pleased by some of those results that we’ve seen.
“Those are the green shoots that we think we can rely on going into the next 12 months.”
Speaking about Superdry’s optimism for the new season, Wills said: “Ultimately, the success or failure all comes down to the product. I’m really encouraged by what I’m seeing in early signs of our autumn/winter performance leading into this season. Last year, we broke records and I know that Julian [Dunkerton, chief executive and co-founder] has done a better job with the product than he did last year.
“I also think fundamentally we’ve got to re-engineer this business model for the post-Covid era and that includes taking some costs out. We can’t miss those cost targets this year, that is really important.”
Wills added that he does not see any signs to suggest this Christmas is going to be a challenge for Superdry.
“Christmas is important but it is becoming less important as customers spread their spending through the year and we become exposed to different markets as well.
“I’ve been pleasantly surprised by how well consumer spending has held up on holidays, cars and those sorts of things throughout this year, so I don’t see any signs at the moment that Christmas is going to be a challenge. But you never quite know what is round the corner,” he said.
Wills credited Superdry’s double-digit growth across ecommerce to the success of its third-party partnerships with the likes of Next and Zalando and said despite the “doom and gloom” surrounding Superdry recently, the brand remains “really strong”.
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