Superdry issues profit warning as Dunkerton begins turnaround plan

Superdry warned on Thursday that its full year profits will come in below market expectations as co-founder Julian Dunkerton begins his attempt to turn the company around following his successful return to the board in April.

For the 13-week period to 27 April 2019, overall revenue dropped by 4.5 percent to 187.8 million pounds, with the company saying the weak results were due to a “poor wholesale and ecommerce performance”.

Global brand revenue (GBR) at the company increased by 3.6 percent year-on-year, though it was down by 5.2 percent in Q4 to 406.3 million pounds. Wholesale also dropped by 9.3 percent in the fourth quarter due to “increased levels of returns, lower than anticipated in-season orders and decisions not to ship to customers that had reached their credit limits.” Ecommerce revenue was up 1.6 percent year-on-year to 163.7 million pounds but fourth quarter revenue was down 3.9 percent to 29.3 million pounds. Store revenue managed to do better, increasing by 2.2 percent in Q4.

'I’m confident we are heading in the right direction'

Commenting in a statement, Dunkerton said: “I am very excited about being back in the business. There’s a lot to do, but after five weeks, I am more confident than ever that we can restore Superdry to being the design led business with strong brand identity I know it can be.

“My first priority has been to stabilise the situation, and all of us in the business are putting all our energy into getting the product ranges right and improving the ecommerce proposition, which are two important steps towards addressing Superdry’s recent weak performance. The impact of the changes we are making will take time to come through in the numbers but I’m confident we are heading in the right direction.”

Dunkerton’s plan to get the struggling retailer back on track already began to materialise in April, with the co-founder announcing the company would stop selling childrenswear and had pulled out of a footwear licensing deal with Pentland Group. According to the Sunday Times, Dunkerton made the decision to slash the kidswear line despite it having received over 200 wholesale orders.

In a company meeting held at the request of Dunkerton, shareholders voted 51.15 percent in favour of him returning to the struggling retailer’s boards after months of speculation. Dunkerton, who remains the company's biggest shareholder with a stake of over 18 percent, was voted back by shareholders in April, winning 51.15 of their votes.

Superdry’s then-CEO Euan Sutherland, chairman Peter Bamford, chief financial officer Ed Barker, and chairman of the remuneration committee Penny Hughes all resigned with immediate effect following Dunkerton’s successful comeback.

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