Superdry's CFO steps down amidst significant sales drop

Fashion retailer Superdry has reported a significant drop in sales and a subsequent exit of its CFO, Shaun Wills.

The company’s financial performance has been impacted by challenging market conditions and unseasonal weather, leading to a 23.5% year-on-year reduction in group sales for the six months to 28 October 2023.

Wills, who has served as Superdry’s CFO for three and a half years, has decided to step down from the board and will leave the company at the end of March 2023.  He will be replaced by Giles David, who has a strong track record in consumer-facing businesses and has successfully operated in turnaround environments.

David’s extensive experience in consumer-facing businesses, including previous roles at McColls and the Casual Dining Group, makes him well-suited to guide Superdry through this critical transition period.

Wills’ departure comes at a time when the company is grappling with a challenging consumer retail market, unseasonal weather, and the underperformance of its wholesale segment.

The financial struggles: A closer look

Superdry’s half-year update for the period up to 28 October 2023 paints a grim picture of the company’s financial performance.

Group revenue plummeted by 23.5% to £219.8 million, primarily due to the challenging consumer retail market, unseasonal weather conditions, and the underperformance of the wholesale segment.

Retail sales experienced a decline of 13.1%, while wholesale sales suffered a substantial drop of 41.1%. Structural changes in the market, strategic decisions such as exiting operations in the US, and ongoing clearance sales further exacerbated the decline in sales.

Not only did Superdry witness a significant decline in sales, but its adjusted loss before tax also worsened. The company reported an adjusted loss before tax of £25.3 million for the first half of the year, nearly doubling the previous year’s figure of £13.6 million. The pre-tax profit stood at £3.3 million, a marked improvement from the previous year’s loss of £17.7 million.

However, the narrowed loss still fell short of the company’s target. In spite of these challenges, Superdry has been working diligently to reduce costs and streamline operations. Total operating costs decreased by 16.1%, primarily driven by lower costs in sales and distribution, as well as central costs.

The company remains committed to its cost reduction efforts and aims to achieve £40 million in savings for the full financial year.

Outlook and future prospects

Superdry acknowledges the difficult market conditions and remains cautious about the future. The company expects the full-year results to reflect the ongoing challenging environment.

Despite the near-term difficulties, CEO Julian Dunkerton emphasises the significant operational strides made during the first half of the year as part of Superdry’s ongoing turnaround efforts.

The company’s focus on cost savings and inventory reduction programs, which have already resulted in substantial savings, demonstrates its commitment to restoring profitability.

Superdry continues to prioritize driving forward its cost reduction agenda while exploring opportunities for growth in foreign markets.

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