Retail giant grapples with store closures and shifting sales dynamics
- Superdry’s Q4 revenue dropped 36.9% to £118.5m due to Covid-19.
- Full-year revenue decreased 19.1% to £705.5m.
- Store revenue fell 22.9% for the year and 57% in Q4.
- E-commerce sales improved by 18.8% in early March before the pandemic impact.
- Wholesale revenues declined 20.1% for the year and 35.8% in Q4.
- 88% of staff have been furloughed to manage cash flow.
- Board members took a 25% pay cut amid the crisis.
- Superdry is exploring additional liquidity and financial flexibility.
Superdry has reported a significant decline in its fourth quarter performance, attributing a 36.9% drop in revenue to the Covid-19 pandemic, bringing total revenue down to £118.5 million. The company’s full-year revenue also suffered, decreasing by 19.1% to £705.5 million compared to the previous year. Store revenue was particularly hard hit, falling 22.9% over the year and plummeting 57% in the fourth quarter alone. The company noted that this decline was a direct result of shifting to a full-price trading strategy, which saw full-price sales increase to 69% for the year. E-commerce sales, while down 8.2% for the full year, showed signs of recovery with an 18.8% increase in the six weeks leading up to March 7, before the pandemic’s full impact was felt. Wholesale revenues also took a hit, dropping 20.1% for the year and 35.8% in the last quarter, as the pandemic disrupted supply chains and customer demand. Despite these challenges, Superdry is beginning to see shipments resume as lockdown measures ease and franchise stores reopen. Prior to the pandemic, the company had reported a slight year-on-year revenue decline of just 1% in early March. However, due to ongoing uncertainty, Superdry has postponed its full-year results announcement originally scheduled for July 9 and has also delayed its final dividend. To manage cash flow during this crisis, 88% of staff have been furloughed, and board members have agreed to a 25% pay cut. The company is also deferring rent and reducing overhead costs by £2 million monthly. Superdry’s lenders have agreed to waive the April 2020 fixed charge covenant test, and the company is in discussions with existing and potential new financing providers to secure additional liquidity. CEO Julian Dunkerton expressed optimism about the shift to online sales, particularly in women’s fashion, which now accounts for half of their sales. He acknowledged the significant impact of store closures but emphasized the company’s commitment to preserving cash and emerging stronger from this challenging period. Superdry remains operational online and is excited about its upcoming Autumn/Winter collections.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Superdry’s financial performance during the Covid-19 pandemic, including specific revenue numbers, actions taken by the company to address the crisis, and the CEO’s perspective on the situation. It is well-researched and objective in its reporting.
Noise Level: 3
Noise Justification: The article provides relevant information about Superdry’s financial performance during the Covid-19 pandemic, including specific revenue numbers and actions taken by the company to address the crisis. It also includes a statement from the CEO, offering some insight into their strategy for recovery. However, it does not delve too deeply into long-term trends or possibilities, nor does it hold powerful people accountable or explore consequences on those who bear risks.
Financial Relevance: Yes
Financial Markets Impacted: Superdry’s stock price and retail industry
Financial Rating Justification: The article discusses the financial performance of Superdry, a fashion retailer, which has been significantly impacted by the Covid-19 pandemic. The company’s revenue has decreased due to store closures and reduced e-commerce sales. It also mentions efforts to preserve cash and explore additional financing options. This information is relevant to financial markets as it affects the stock price of Superdry and the retail industry as a whole.
Presence Of Extreme Event: Yes
Nature Of Extreme Event: Financial Crisis
Impact Rating Of The Extreme Event: Major
Extreme Rating Justification: The extreme event is the Covid-19 pandemic, which caused a 36.9% year-on-year revenue drop in Q4 and led to store closures, furloughing of 88% staff, and delay in full-year results announcement.
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