Fashion label Superdry has issued its third profit warning in eight months, with the latest alert coming less than six weeks after the brand’s founder Julian Dunkerton forced his way back into the boardroom.
Dunkerton, the company’s biggest shareholder, last month won a six-month battle to rejoin the company, prompting the entire board to resign – including chief executive Euan Sutherland.
Superdry said it would miss City forecasts for a pre-tax profit of £54.1m-£59.4m for the year to 27 April. Group revenues were flat on the year but fell 4.5% in the fourth quarter. In the last three months wholesale revenues slumped 9.3% and online sales were down 3.9%, while stores put in a better performance with 2.2% growth.
Dunkerton, who is the interim chief executive, said he was ramping up the number of products sold online. At the moment only 4,000 out of 20,000 items are available online. Dunkerton said he was also focusing on restoring Superdry’s “strong brand identity”.
He said: “My first priority has been to stabilise the situation and all of us in the business are putting all our energy into getting the product ranges right and improving the e-commerce proposition, which are two important steps towards addressing Superdry’s recent weak performance.”
Dunkerton is also putting more stock on the shop floor at its flagship stores, including London’s Regent Street, and has cut back on promotions to improve profit margins.
Two-for-one deals at outlet stores have been ditched, 500 new products are planned in the next six months and plans for a new range of childrenswear developed by the previous management have been abandoned.
Having handed over the role of chief executive to Sutherland in 2014, Dunkerton remained at the company and latterly held the part-time role of “founder and product brand director”. However, he quit in March last year after disagreeing with Sutherland’s revamp of the business, which then led to a collapse in sales and a string of profit warnings.
The shares, which were changing hands at more than £20 in January last year, collapsed by 80% to 405p in December. As details of the new profits alert and Dunkerton’s update were revealed they climbed 9p to 489p.
Launched as a clothing stall at Cheltenham market in 1985, Superdry has expanded in recent years from its trademark hoodies and sweatshirt tops into dresses, denim, sportswear and licensed goods.
Dunkerton said: “The impact of the changes we are making will take time to come through in the numbers but I’m confident we are heading in the right direction.”
Superdry said Dunkerton would run the company as interim chief executive until it was back on track. It is looking to recruit a new chief financial officer and non-executive directors.
Peter Williams, Superdry’s new chairman – who is a former Selfridges chief executive and ex-chairman of Boohoo – said: “The company’s financial performance won’t be turned around overnight but we know what we need to do and we are wasting no time in addressing the challenges which the business faces.”
The company has been reviewing its 1,179 stores and will make a provision for onerous leases and underperforming stores when the full-year results are announced on 4 July.
