Superdry to miss 2020 targets as it braces for another difficult year
Superdry does not expect its online sales to offset losses, as it predicts it will miss its 2020 targets due to the “unprecedented challenges” of the coronavirus outbreak.
The retailer said the majority of Superdry’s European store estate has been affected by mandated closures, which contributes around 40 per cent of weekly sales forecasts.
Currently, stores in the UK and US remain largely open, but footfall has reduced on average 25 per cent week on week.
Shares are down 11.69 per cent.
In a trading update at the start of the year and prior to the outbreak of coronavirus in Europe, Superdry forecast it would generate between £5-6m in sales per week for the remainder of the year.
The group said: “We do not expect the decline in sales from our retail stores to be fully mitigated by sales through our e-commerce channel, which remains fully open for business”.
Superdry is stress-testing its forecasts under a range of scenarios and said the board is taking “sensible measures to preserve cash”, which includes negotiations with landlords regarding sore rental relief.
The group has £47m net cash on its balance sheet and said it is in discussions with its lending group to provide “additional flexibility and liquidity” to support the group through this volatile period.
Chief executive Julian Dunkerton said: “Along with everyone else, Superdry is experiencing major disruption to our business operations and recovery as we seek to protect our staff and customers from COVID-19.”
“We are taking 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. We also welcome the measures announced by the Chancellor yesterday to support UK businesses.”
In December, Superdry revealed it swung to a £4.2m loss in its first half-year results after Dunkerton returned to the company. The Superdry boss had won an audacious bid to reinstall himself on the board last April.
The coronavirus outbreak is accelerating the already rapid decline of the British high street as shops shutter amid rising rents and a decline in footfall. Yesterday, Laura Ashley fell into administration as coronavirus had “an immediate and significant impact on trading”.