- Blames February and March retail sales
- Possible capital raising
- Cost-cutting drive of over £35 million planned
Shares in Superdry (SDRY) fell 18% to 87.50p in mid-morning trading after the fashion retailer said it would struggle to ‘breakeven’ in 2023.
Superdry shares have fallen 41% over the past year and shed 95% of their value since peaking at around the £19.30 mark in 2017, according to earlier reports by Shares.
The fashion retailer withdrew its ‘broadly breakeven’ full year profit guidance pointing to a ‘challenging trading environment’ and disappointing retail sales in February and March.
Superdry now expects revenue for 2023 in the range of £615 million to £635 million compared to £609 million last year.
Russ Mould, investment director at AJ Bell, said: ‘High Street fashion brand Superdry’s soggy sales outlook and decision to withdraw profit guidance suggests it is really struggling against a backdrop where shoppers are becoming more careful with their money.
‘Blaming the weather for poor performance is never something likely to endear a business to investors and yet Superdry reaches for this excuse as it seeks to explain a downturn in sales in February and March.
‘Today’s update is only likely to fuel the argument that the brand is just no longer as relevant as it once was, with fewer people prepared to pay a premium for its faux-Japanese stylings.’
CAPITAL RAISING AND COST CUTTING
Superdry also said it was considering raising capital ‘including a potential equity raise up to 20%’ which is ‘fully supported by founder and CEO Julian Dunkerton.’
The fashion retailer has also identified initial cost savings of over £35 million and continued range reduction.
It hopes these savings will be fully realised by the end of 2024 ‘with the costs to achieve them primarily incurred in calendar year 2023.’
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.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The editor of the article (Martin Gamble) owns shares in AJ Bell.
