Shares in Superdry (SDRY) plunged 13.7% to 86p on Wednesday after the premium clothing brand pulled formal guidance for its 2020 financial year.
This was given as recently as 10 January, when the embattled retailer warned annual underlying pre-tax profit could slide to between £10m and zilch following poor festive trading.
Co-founder and chief executive Julian Dunkerton doesn’t expect online sales and cost saving measures, reining in capital spending and haggling with landlords over store rental relief, will be sufficient to offset a slump in sales from retail stores.
Investors were further unnerved by the news Cheltenham-based Superdry is looking to put additional financing in place to see it through the coronavirus crisis.
TURNAROUND PLAN UNRAVELS
In today’s update, Superdry warned it faces ‘unprecedented challenges’ arising from the coronavirus and has temporarily shuttered stores in a number of countries, measures which will significantly impact trading and mean Superdry won’t meet market estimates that had already been significantly massaged down amid tough recent trading.
Amid the alarming uncertainty arising from the coronavirus, the branded fashion retailer has pulled guidance for financial year 2020. Before the outbreak, Superdry’s store estate was forecast to generate between £5m and £6m in sales per week for the rest of the financial year. But in a devastating blow to Dunkerton’s recovery plan, the bulk of its European estate has been closed as governments mandate shutdowns.
In the UK and US, Superdry’s stores remain largely open, yet footfall has slumped with shoppers beginning to self-isolate to combat the dreaded coronavirus that is plunging the globe into recession.
STAYING CONFIDENT, BUT SHORING UP FINANCES
While £47m of net cash provides a bit of breathing space, Superdy warned it is ‘mitigating action wherever we can but the situation is very fluid and uncertain, and we are working to put in place additional financing to secure our recovery’.
Welcoming the measures announced by Chancellor Rishi Sunak yesterday to support UK businesses, Dunkerton insisted ‘the safety of our staff and customers remains our number one priority and we continue to take all appropriate action in line with local government advice. Together, we’re going to make our way through this unprecedented challenge, and I’m confident we can reset the brand and deliver on our transformation plans.’
