Superdry may consider insolvency as sales plummet

Superdry saw its sales plummet by almost a quarter, while losses doubled. The British fashion retailer, which has been ailing for years, has asked PwC to look at restructuring options.

Challenging and unpredictable

In the six months to 28 October, sales at Superdry fell 23.5 % to 219.8 million pounds (260 million euros). The chain blamed the cold summer and then exceptionally warm autumn, but also called the consumer market that it called “challenging and unpredictable”.

Despite a cost-cutting plan worth forty million pounds, losses also doubled to 25.3 million pounds (30 million euros). Superdry claims that over 20 million pounds in costs have been cut so far, but is lowering profit expectations to for the full financial year. The increased losses have meant that Superdry is going to replace its CFO Shaun Willis on an interim basis.

Insolvency?

The difficulties may continue for some time, CEO Julian Dunkerton admits. He is therefore taking on PricewaterhouseCoopers as consultant to help restructuring the company, Sky News reports. Insolvency proceedings are a real possibility, after which the number of shops and jobs could be cut sharply.

Superdry confirms that it is exploring various options for cost savings with the help of advisers, but says it is not certain that these options will be implemented. The company already has more than 100 million pounds of credit arrangements with Hilco and Bantry Bay Capital and recently sold its brand rights in Asia.