Superdry is prioritising investment into online and multichannel after a first half in which 50% of its sales were made online. At the same time, ecommerce grew by 49.8% compared to the same time last year. But customers’ shift online was also a move away from shops, where sales fell by 44.8%.
The retailer reported sales across all channels of £282.7m in the 26 weeks to October 24, down by 23.4% from £369.1m a year earlier. Pre-tax losses widened to £18.9m from £4.2m last time as the retailer counted the £10.6m costs of trading disruption, after £13.5m saved in costs and government support of £12.3m.
In the second half of the year so far, group sales have fallen by 27.2% in the 11 weeks to January 9. Online sales grew by 13.2%, and by 25.7% on its own website – but store sales were 52% down, reflecting the 38% of trading days lost during the period. Sales via wholesale were down by 23%. As of January 9, 173 – or 72% – of its stores were closed as a result of temporary lockdowns.
Superdry is now looking to improve its digital business and to make sustainability a core part of its business. It says it is getting record levels of engagement with influencer-led marketing around its latest autumn/winter collection. So far this year, its followers on social channels have risen by 5% to 3.3m. Its focus on sustainability is reflected in the finding that 38% of sales from that collection are from organic cotton and goods that are made from recyclable or low impact materials – including all of its outerwear jackets.
Other ecommerce investment is to include improving search and navigation on the website, while optimising retargeting based on the items in abandoned baskets off the website.
Looking ahead, Superdry now expects footfall and store will remain low in the first part of its current financial year, partly offset by furlough support and rent waivers, and that ecommerce growth will slow by the end of the year.
Superdry founder and chief executive Julian Dunkerton says: “Covid-19 has brought substantial challenges to Superdry as with many other brands, and this has continued through the first half and into the second with renewed lockdowns in our key markets. Our team has responded incredibly well and above all we’ve been focused on looking after our colleagues and customers and ensuring everyone is keeping safe.
“While revenue and underlying profit have been impacted by the external conditions, the brand has continued to focus on the reset, however, with over 70% of stores currently closed and having to shut a significant number over peak, it will take time to see the benefits of all our hard work flow through to the results.
“We are making great progress with our influencer-led, digital marketing strategy, enabling us to better target new and existing customers. I am particularly excited about our recently announced partnership with Neymar Jr, a globally recognised sports star with over 143m worldwide social media followers. I am also very proud of how we are embedding sustainability in every part of the business, with responsibly sourced ranges at the heart of our AW20 collection. I believe sustainability is becoming critically important to our customers and I’m committed to Superdry becoming one of the leading global sustainable fashion brands.”
Superdry says the impacts of Brexit will be felt in areas from its people to tariffs, logistics, product standards and currency fluctuations. It was able to minimise immediate costs by optimising inventory management and intake ahead of December 31, but it says it will be some time before it fully understands the implications for its business, monitored via an internal working group that has already put plans in place in order to reduce the effects of duties and tariffs and avoid delays.
The retailer says that although its size makes it well-placed to manage Brexit, there will be extra costs along the way. It says: “Superdry is a global business with corporate and operational capability both in the UK and mainland Europe, which means that we are well-equipped to deal with the challenges of Brexit, as we can service EU customers from within the EU and not as a UK-only organisation. However, though this diversified distribution centre network has allowed us to mitigate many of the potential costs, there are now additional considerations and frictional costs of relocating inventory once it has been received into the business."
Superdry is a Top50 retailer in RXUK Top500 research.