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Superdry reports rising sales and profits as sales shift from online to store in ‘partial reversal’ of pandemic trends

Image courtesy of Superdry

Image courtesy of Superdry

Superdry says it is seeing traffic move away from online and back to store in a “partial reversal of trends seen through the pandemic”. But it says as yet footfall has not recovered to pre-Covid levels. Sales grew by almost 10% in its latest full-year, and it returned to profit. Online sales fell by almost a quarter, and by 29% in the UK market alone – but a recovery in-store helped the business to overall growth.

The fashion retailer, ranked Top100 in RXUK Top500 research, is responding to rising costs and economic uncertainty – caused by factors from supply chain capacity to the Russian invasion of Ukraine – by raising prices by between 4% and 6% during the autumn and into next year. It has also introduced online delivery charges on all orders. Currently standard delivery, taking between two and four days, costs £2.99 and next-day delivery costs £5.95 but shoppers can also opt to collect from store next-day for free and returns from the UK, Ireland and US are also free.

Other steps that it is taking include making more ‘core product’ that lasts more than one season and does not need to sell out, and bringing in targeted clearance events in-store. It continues to look for operational savings and to renegotiate store rents. 

Full-year figures

The update came as Superdry reports full-year figures. Group revenue in the 53 weeks to April 30 2022 came in at £609.6m. That’s 9.6% up on the same time last year. But while store sales of £228.4m were 62.6% up on last year, online sales of £155.7m were 22.8% down, falling most sharply in the UK market (-29.6%). Wholesale revenues of £225.5m were 5.5% up on last time. 

Ecommerce accounted for 40.5% of retail revenues in its latest full year – 18.5% lower than the previous year. That, says Superdry, reflects both the shift back to in-store trading post-pandemic, and reduced levels of online promotions.

At the bottom line, Superdry returned to profit, posting pre-tax profits of £17.9m, recovering from a loss of £36.7m a year before.

Trading update

In an update on its current financial year, the 22 weeks to October 1 2022, group revenue is 7% ahead of last year, with growth in stores (+14.3%) and online (+4.5%) taking retail to a total of 10.7% growth, while wholesale is 1.6% ahead of last time. 

The retailer has a £70m asset backed lending facility which is due to expire in January 2023 and a rolling £10m overdraft facility. Drawdown on the facility was £18.4m at the end of its financial year and £45.3m on October 1. The business is confident of being able to renew this facility by January but until that happens there it says is a material uncertainty to the group’s status as a going concern.

In the current year, Superdry is working on the assumption that ecommerce will benefit from investment including a move to a microservices platform, completed in August. The improvement to user experience, it says, should result in improved conversion rates and basket values. 

It is also working on the expectation that store trading will improve year-on-year as shops remain open but that footfall will stabilise at a lower level than before Covid, and that wholesale will recover slowly. Profitability in its current financial year, predicts Superdry, will be in line with its latest year. 

It has followed a strategy of engaging via social, where it now has more than 270k followers on TikTok – up from zero last year. It now works with 2,349 influencers, up from 272. Its videos have had more than 22m views and more than 33m followers.

Julian Dunkerton, chief executive of Superdry, says: “These are exceptional times for retail and for the economy more generally, and like all brands we’re having to work harder than ever to drive performance. Against that backdrop, I am pleased that we managed to return the business to full-year profit, driven by increased full price sales, whilst also making strong strategic progress. I’m proud of the strides our team has made, delivering great product while also making a step-change in our social and digital capabilities and real progress towards our sustainability objectives.

“Superdry is a premium, affordable, brand, which should mean we are well-positioned as customers think more carefully about their purchases. That said, given the current challenging conditions, we continue to run the business prudently while remaining focused on delivering our strategic goals.”

Sustainability strategy

Superdry has the ambition of being the leading sustainable listed fashion retailer and in today’s update it said it was committed to its goal of converting 20,000 farmers in India to organic practices and using 100% organic cotton in our garments by 2025. As at the end of FY22, it had invested in training to convert 7,508 farmers, up from 5,684 last year and donated more than 65m organic cotton seeds. Almost half (47%) of its purchased products for the autumn/winter and spring summer collections in the year just gone were sustainable. That’s 14% up on the previous year. That included swimwear and outwear jacket fillings made of 50.4m recycled plastic bottles.

It has also introduced vintage sections to stores including its Oxford Street flagship, and its recycled and ringspun collections focusing on circular design and how many times an item can be worn, not just the sustainable materials used to make it.

Superdry sells online, from 220 shops and 475 franchisees and licensees in more than 50 countries. Its 21 branded websites are translated into 13 languages and it also fulfils orders for sales via 30 third-party online partners. 

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