21 Sep 2020
Posted in Coronavirus
Superdry’s turnaround plan halted as COVID-19 dampens clothing demand
Following today’s release of Superdry FY figures for 2019/20, Chloe Collins, Senior Retail Analyst at GlobalData, a leading data and analytics company, comments:
“Superdry’s woes were amplified in its final quarter of FY2019/20, with the impact of the COVID-19 pandemic stifling the appetite for new clothing and footwear. While its CEO Julian Dunkerton has had significant plans to revitalise the company, the outbreak has put a major spanner in the works, with revenue declining by 36.9% during Q4 FY2019/20, resulting in sales for the full year falling by £167.3m to £704.4m, and the business plunging into the red, with an underlying loss before tax of £41.8m.
“The business saw a spurt in demand throughout June and July, with group revenue improving to down 18.1% and 19.8% on last year respectively, thanks to store reopenings and impressive online sales (up 126.7% in June and 56.8% in July) aided by Superdry’s end of season sale, with heavier discounts needed than last year due to surplus stock. However, performance has weakened again in recent weeks, with total revenue for the seven weeks to 12 September down 30.3%, and online sales stabilised to only 4.1% above last year, despite store sales still being down by almost a third. With plans to revert back to full price selling from AW20, as well as increasing digital marketing further with influencer-led campaigns, the remainder of the year will be crucial in telling whether Superdry can weather the COVID-19 storm.
“Superdry’s abundance of hoodies and joggers will have aided its appeal during the pandemic, as shoppers have increasingly prioritised loungewear purchases while spending more time at home. With further local lockdowns looking likely in the UK, consumers will continue to seek comfortable clothing, however Superdry must make its designs more trend-focused to encourage more frequent purchases, as its prominent branding can also prove off-putting to some shoppers, who are becoming increasingly brand loyal and have built a preference for sports brands like Nike and Adidas. Superdry is also facing tough competition from fast fashion players such as boohoo.com and ASOS, with its prices appearing expensive in comparison, it must better justify the quality and longevity of its styles through social media and invest in celebrity endorsements to boost desirability.”