UK firm Superdry's retail sales decline 13% in H1 FY24

The brand's autumn/winter 2023 (AW23) collection experienced a delayed uptake, impacting its overall performance, the company said in its H1 FY24 trading updated.

The brand's wholesale segment witnessed a more significant downturn, with a 41.1 per cent decrease compared to the previous year. This decline was partially anticipated due to Superdry's exit from the US wholesale operation. However, timing differences and underperformance in this channel exacerbated the situation.

Recent colder weather conditions in the UK and Europe, combined with Superdry's established strength in outerwear, have led to an uptick in sales. Nevertheless, sales in the six weeks following the half-year period are still approximately 7 per cent lower on a like-for-like basis.

Despite the adverse market conditions and a trading performance falling short of management expectations, Superdry has made strides in its strategic priorities, including a programme to recapitalise the balance sheet. The company anticipates that its profits for the year will reflect the weaker trading performance observed to date.

Superdry's cost efficiency programme remains on track, with an expected £35 million in cost savings to be realised within the year. The company continues to explore further opportunities to reduce its fixed cost base.

The inventory reduction programme is progressing well, with the clearance of aged stock. Superdry has also taken measures to bolster its balance sheet, receiving £28.3 million, net of transaction costs and taxes, from an IP joint venture and the disposal of assets in the South Asian region to Reliance Brands.

To enhance liquidity and support its turnaround and cost efficiency plans, Superdry has secured a secondary lending facility of up to £25 million with Hilco Capital Limited.

As part of its strategy to reshape its store estate, Superdry is actively pursuing strategic store closures and regearing of rental leases. This strategy is complemented by programmes aimed at optimising store space and enhancing profitability.

“The unseasonal weather through the early autumn led to a delayed uptake of our autumn/winter range and this impacted sales in the first half of the year. Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance. The operational progress we have made in the first half has been more encouraging with the IP sale for the South Asian region and strong progress on our cost efficiency programme,” said Julian Dunkerton, founder and chief executive officer.

Fibre2Fashion News Desk (DP)