Shares in Superdry sank by 10.6 per cent today as the clothing brand announced it had almost doubled its losses in the financial year ending 25 April 2020.
The retailer reported a pre-tax loss of £166.9million, up 87 per cent from last year’s £89.3million loss.
The company said it had been severely impacted by the forced closure of all its stores, which pushed revenue down 19 per cent to £704.4 million.
Founder and CEO Julian Dunkerton said: ‘Our priority throughout the pandemic has been the wellbeing of our colleagues and customers.
Julian Dunkerton co-founded Superdry and returned as the company’s chief executive last year after a boardroom coup in a bid to turn its fortunes around
‘As with all retailers, we have experienced significant disruption to our operations, and this has inevitably had an impact on our FY20 results, but I’m proud of how everyone in the business has stepped up during this exceptional time.’
The company said group revenue fell 19.2 per cent year-on-year to £704.4m from £871.7m it reported in 2019.
It explained this was driven by a decline in both divisions, with retail dropping 18.2 per cent and wholesale declining 20.7 per cent.
The drop in revenue was also evidence of a change in direction for the business as it had to adopt a heavily discounted promotional stance to help clear excess stock which accumulated during the temporary store closures resulting from Covid-19.
Superdry said stores in Europe began to reopen from the start of May, with the region performing comparatively better over the year to date (-32% year-on-year) than the UK (-55%) and the US (-75%), which saw later openings and still have a small number of stores closed
Around 95 per cent of Superdry’s stores have now reopened, while the company has enjoyed a boost to its online sales.
Dunkerton said: ‘While our underlying profit has been impacted by trading performance during the year, including Covid-19-related store closures, I am particularly pleased by how strongly e-commerce has performed, with the 2021 financial year first-quarter revenues nearly doubling year-on-year.
‘This has been complemented by our increased digital consumer engagement, which helped drive a stronger womenswear mix than we have ever seen before.
‘We are delivering on the reset of the business, despite the impacts of the pandemic.
‘This has included reinvigorating the store design and layout, preparing for a relaunch of our website, and significantly increasing the number of options available both in store and online.
‘Above all, I am very excited about our new AW20 collection which will be almost fully ranged by the end of October and is the first full collection I’ve overseen since my return to the business last year.
‘It reflects our new brand philosophy and a return to Superdry’s design-led roots, which encompass a commitment to sustainability.’
The company, which was struggling before the coronavirus (Covid-19) crisis had secured new loans from lenders like HSBC and BNPP, which will run until January 2023.
In January it reported dismal Christmas sales with Dunkerton admitting that his plan to wean the company off discounting had backfired as rivals slashed prices heavily over the festive season.
During lockdown the company furloughed 88 per cent of its staff and agreed rent deferrals with landlords.
The company said the board would not be recommending a final dividend to shareholders for 2020.
Commenting on its outlook for 2021 the company said it remained cautious on the shape of economic recovery.
It reported that the Covid-19 pandemic had created unprecedented levels of uncertainty including, but not limited to the recovery in consumer demand.
It said it had also suffered from the impacts of social distancing measures, levels of competitive discounting, supply chain disruption, and geopolitical factors.
It added: ‘From a strategic perspective the company will continue to focus on design, product, consumer targeting and highly efficient operations, to ensure that it maximises performance where possible to drive the brand turnaround, grow scale and return the brand to sustainable, profitable growth.’