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Superdry and Next report online growth despite challenging market

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Superdry: thinking global and digital

Superdry this week said its focus on digital and on international had given it a boost online and over unveiled fast online growth in its latest full year. 

The fashion retailer, a Top50 retailer in IRUK Top500 research, reported, in a pre-close trading statement, global brand revenue of £1.6bn in its 2018 full-year to April 28. That’s up by 22.1% on the previous year. Ecommerce grew by 25.8% on last time, while wholesale was 29.6% ahead. Pre-tax profits, it said, were likely to be in the range of £96.5m to £97.5m, equivalent to double digital growth, though there would be a £7.2m writedown in relation to its Berlin Kranzler flagship store investment, made in 2015, and it expects a £3m loss in its US business.

Chief executive Euan Sutherland said the brand’s growth had come as it sharpened its focus on its global digital brand strategy.

“We benefit from a clear brand positioning, an agile infrastructure that serves our global consumers through a truly multichannel proposition and increasing operational excellence,” he said. “Our multichannel proposition means consumers can choose how they want to engage with the brand, allowing them to switch easily between our stores and digital channels. While the consumer environment remains challenging, we are confident that Superdry’s reputation for quality, design detail and strong value for money, underpinned by our continued investment in the business, leaves us well placed.”

A focus on the brand included work on integrated digital market, as well as sponsorship placed around the interests of its customers. That included the SuperdrySounds summer festival, as well as the role of official clothing suppliers to the UK delegation at the 2018 Invictus Games in Sydney.

Superdry said the business also benefitted as it put an “industry-leading” order management system into place, while extending multichannel capabilities to its European and US distribution centres. In the autumn it will carry out work to integrate its wholesale and retail inventory pools.

During the year it opened new localised ecommerce sites in the US and Switzerland, and focused on “disciplined expansion through all the brand’s eight channels to market”. That included 75 new franchise stores in 33 countries, and appointing wholesale partners in eight new markets. While its development in China was in line with plans, it looks set to make a loss of about £3m in its US business, as a result both of its investment in bringing its wholesale business in-house, and construction and low-occupancy issues affecting six shops in total. 

Next: ecommerce-driven growth

Next this week reported that its sales had staged a recovery, thanks to online shoppers.

The fashion retailer, a Leading retailer in IRUK Top500 research, said in a first-quarter trading update that full-price sales were up by 6% for the 14 weeks to May 7, driven by ecommerce growth of 18%. Sales in shops, meanwhile, were down by 4.8%, although sales from new space were 0.4% ahead.

Overall sales were around £40m ahead of internal forecasts, thanks to unusually warm weather, and that is set to add around £12m to full-year profits. However, despite this buoyant opening to the year the the retailer still anticipates 1% growth in the rest of the year, to January 26 2019, and 2.2% growth in the full year. 

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