Superdry is sinking deep: the British fashion label has now reached a record loss of more than one hundred million euros, while turnover remains stagnant.
Trouble on the domestic market
The chain is in trouble: turnover has fallen significantly on its domestic British market and now profits have also sunk far below zero, according to the provisional annual figures for the past financial year 2018/19. Total turnover stayed almost the same at 871.7 million British pounds (970 million euros): a tiny drop compared to the 872 million pounds of a year earlier. On the British Isles, Superdry's own retail dropped by 8.2 % and wholesale by as much as 15.7 %. In the rest of Europe, the company did achieve growth.
The chain believes the difficulties in Britain weighed heavily on profits: the company was forced to pay a one-time expense of 129.5 million pounds (140 million euros) for devaluations and depreciations on lease agreements for store buildings. 114 loss-making stores were involved. In the end, the company result was blasted down from a profit of 50.7 million pounds in the previous year to a loss of 98.5 million pounds (110 million euros) now.
Back to the roots
Founder Julian Dunkerton admits that the company's problems can not be solved overnight. He returned to power in March, after having quit as CEO in March 2018. Ongoing difficulties at the company caused him to take up the top role once more. The incumbent management team left immediately after Dunkerton's return.
The CEO hopes he can turn the tide by returning to the roots of the label: more emphasis on design, product quality and a customer-friendly retail approach. He also wants to bring Superdry to the Asian market, believing this will help the label to return to strong, profitable growth.