Fashion chain Superdry has slashed its sales outlook and revealed plans to cut costs by more than £35m after seeing dampened consumer spending.
It said issues outside the company’s control, including cost-of-living pressures and poor weather weakening demand for spring and summer collections, meant sales in February and March had “not met our expectations”. The company, which has its headquarters in Gloucestershire, told shareholders on Friday, April 14, it has decided to withdraw its previous profit guidance that it would broadly breakeven for the 2023 financial year.
The brand said its planned multimillion-pound cost cutting could partly be achieved by “estate optimisation”, suggesting shop closures, and reducing its clothing ranges. Bosses added that capital raise options were “being considered”, including a potential equity raise of up to 20%, which they said would be “fully supported” by Julian Dunkerton, the label’s founder and chief executive.
Read more: Graphene firm Versarien cuts staff and bosses’ pay to reduce costs
Mr Dunkerton said: “The Superdry brand continues to evolve but there is no doubt that the market conditions we face are challenging, compounded by the issues we have previously disclosed and are working to address in wholesale. As a result, while we continue to deliver like-for-like growth in retail sales, we need to ensure our business is in the right shape to navigate these difficult times, which is why we are looking hard at our cost base.
“My belief in the Superdry brand is stronger than ever which is why I’m prepared to provide material support to any equity raise undertaken. I am confident that we have the right plan and, working together as a team, the business will emerge from the current turbulence stronger than ever.”
It comes after the clothing brand downgraded profit forecasts in January, despite a boost in sales over the festive season. Bosses had previously estimated profits for the current financial year of between £10m and £20m. In its latest update, posted on the London Stock Exchange, Superdry’s board said it now expected revenue for the current year to be in the range of £615m to £635m, compared to the £609m recorded for 2022.
Last year Superdry senior leadership team had warned of "tough times" ahead due to rising inflation and the "uncertain" economic climate. In December, the firm secured an £80m refinancing deal with Bantry Bay Capital, with the board saying on Friday that the US hedge fund had "increased the flexibility of the facility”.
Read next:
- Amazon set to close its Book Depository online shop amid global job cuts
- Garden furniture supplier Bramblecrest becomes employee-owned business
- Property investment firm Robert Hitchins expands Bristol office portfolio
- South West football clubs top of the league for sustainability
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
