China News Service, February 6 (China News Finance Reporter Wu Jiaju) Revenue has declined, and the stock price once fell to an all-time low... The British fashion brand Superdry (extremely dry) is in deep trouble. At the same time, the "cool and uninhibited" Superdry has repeatedly cited the weather as the reason for weak sales.
Superdry always encounters "God is not in favor"
On February 5, Sino-Singapore Finance checked Superdry’s official website and saw a notice stating “Winter Sale, up to 70% discount”.
According to a report by British Sky News on January 29, Superdry is weighing a radical restructuring that may involve a large number of store closings and layoffs.
The report said the company and its advisers at PwC were working on plans that could lead to a corporate voluntary arrangement (CVA) or restructuring. Both are insolvency mechanisms that enable a business to reduce its liabilities to creditors. The aim may be to close underperforming stores, impacting jobs and forcing landlords to reduce rents.
Previously, Superdry had just released weak sales results.
On January 26, Superdry released its semi-annual report stating that in the 26 weeks ending on October 28, 2023, the group's revenue was 219.8 million pounds, a year-on-year decrease of 23.5%. Adjusted pre-tax loss was 25.3 million pounds, a year-on-year increase of 86%.
Picture from Superdry semi-annual report
Superdry attributed the weak sales to a tough consumer retail market, unusual weather and poor performance in its wholesale business. And this is not the first time the company has mentioned "weather" in its financial report.
Superdry's annual report shows that in fiscal year 2023 (52 weeks ending April 29, 2023), Superdry Group's revenue was 622.5 million pounds, its adjusted pre-tax loss was 21.7 million pounds, and its loss during the period was 148.1 million pounds.
In the 2023 annual report, Superdry mentioned "weather" many times. For example, when talking about the wholesale business, the company said that lower shipments of higher-value AW22 inventory in the first half of the year, as well as
bad weather in the second half of the year
, led to reduced demand for the SS23 series, which caused the wholesale business revenue to decline by 19.1% year-on-year. %. When talking about long-term risks, the company said that reduced productivity caused by environmental damage and extreme weather events may affect the company's revenue and costs if it leads to increased pressure on consumer demand and supply chain operating pressure.
According to the British Sky News network, at the end of 2023, Superdry blamed weak sales on
unusually mild autumn weather
, causing its stock price to fall to historical lows.
Superdry said in a trading report that the consumer retail market remains challenging and unpredictable,
with extreme weather events in the summer followed by one of the warmest autumns on record
, which continued into the peak Christmas trading period. , which does nothing for sales performance.
After the sales data were released on January 26, the company's share price fell further, closing at 16.44 pence per share on January 26, with a market value of only 16 million pounds.
It is worth mentioning that the London Stock Exchange website shows that Superdry’s share price reached 1927.72 pence per share at the end of 2017.
Picture from the London Stock Exchange website
Not long ago, Superdry announced that its financial director Sean Willis will resign in March this year.
Taken private by the founder?
There has been speculation that Superdry founder Julian Dunkerton will seek to take the company private. Julian Dunkerton was ousted from the company and returned to the company in 2019.
According to a report by British Sky News on February 2, Julian Dunkerton has held preliminary discussions with Gordon Brothers and Rcapital, hoping to provide funds for the acquisition of Superdry. Both companies specialize in investing in financially distressed companies. . Negotiations are not yet in an advanced stage and people close to the talks have warned they could still fall apart.
Superdry said in a statement in response to the surge in its share price that Julian Dunkerton had confirmed it was in discussions with potential financing partners ("potential sponsors") to consider various options for the company, which could include taking an interest in all of the company's existing assets. A cash offer for issued and to-be-issued share capital which he does not yet own.
The report stated that after experiencing a series of catastrophic events such as profit warnings, Superdry's market value has been less than 50 million pounds. Superdry also has more than £100 million in borrowings after securing funding from Bantry Bay Capital and Hilco.
"Cool and uninhibited" Superdry
Public information shows that Superdry is a British brand founded in 2003. However, because its products incorporate Japanese street style and Japanese characters, they are often mistaken for Japanese brands.
Superdry also had its moment of glory. In March 2010, Superdry was successfully listed on the London Stock Exchange. Stars such as Beckham have also regularly appeared at Superdry conferences.
According to CCTV Finance, in 2016, Superdry officially entered the Chinese market. In the past four years, Superdry has opened more than 60 stores in the Chinese market and opened flagship stores on e-commerce platforms such as Tmall and JD.com.
Superdry said that since the company entered the mainland Chinese market, it has "continuously disrupted the market with its cool and uninhibited trend attitude, combined with fashion and music." However, Superdry’s performance in the Chinese market is not satisfactory.
Picture from Superdry official WeChat account
In June 2020, Superdry announced that it would temporarily leave the Chinese mainland market, saying "To those years when we were super together".
However, once Superdry left, he never came back, and now the company is in deep trouble. (over)