Superdry announces cost savings programme and profit warning

Superdry has issued a trading update in which it detailed how performance was "weaker than expected" as trading remained "challenging".

In an update for the 26-week period to October 28, the clothing retailer, which has its headquarters in Gloucestershire, said that H1 2024 was characterised by a challenging consumer retail market, with the "abnormally mild autumn" resulting in a delayed uptake of its AW23 collection.

Retail was down 13.1% year-on-year, with stores and ecommerce impacted by the warmer weather, coupled with a later start date to the retailer's end-of-season summer sale. Wholesale was also down year-on-year by 41.1%, which Superdry said was due to the decision to exit its US wholesale operation and driving by timing differences and the underperformance of the channel.

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The retailer said the external environment has "proven challenging and trading performance has been significantly below management expectations". Profits so forth Superdry expects to reflect this weaker trading. Bosses will provide a further update in the company's interim results in January.

Julian Dunkerton, founder and chief executive, said: "The unseasonal weather through the early autumn led to a delayed uptake of our Autumn/Winter range and this impacted sales in the first half of the year. Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance.

"The operational progress we have made in the first half has been more encouraging with the IP sale for the South Asian region and strong progress on our cost efficiency programme.”

The company, however, said its cost efficiency programme "remains on track with an initial £35m of savings expected to be realised within the year". Further action taken to support the balance sheet with funds received of £28.3m, net of transaction costs and taxation, for IP joint venture and disposal of assets in the South Asian region to partners Reliance Brands.

Elsewhere a secondary lending facility of up to £25m has been agreed with Hilco Capital Limited, providing Superdry with "improved liquidity" to help the implementation of the turnaround plan and cost efficiency programme.