Superdry has issued a profit warning following a slump in sales during the Christmas period, but boss Julian Dunkerton insists the plan to return the fashion retailer to “sustainable long-term growth is on track.”
The fashion retailer posted a 15.8% decline in group revenue over the 10 weeks from October 27 to January 4, triggering the business to lower profit expectations to the range of £0 and £10m.
The fashion retailer had previously issued profit guidance in the range of £20m following its interim results last month.
Superdry attributed its decline in sales to the combination of “unprecedented levels of promotional activity” from competitors, weak consumer demand, slow trading on older product and insufficient supply of better selling new ranges.
The fashion retailer’s store sales dropped 18.5% during the period, and was down across online and wholesales 9.3% and 16.9% respectively.
However, sales of full price products comprised 88% of sales during the period, up from 46% the previous year, in keeping with Superdry’s strategy to reduce discounting and build margin.
Chief executive Julian Dunkerton said: “Everyone at Superdry continues to work intensively to deliver the turnaround of the business.
“While we have always said it will take time, we continue to make progress in implementing our strategy. A key element of this is to focus on and return to full price sales and reduce promotional activity, and we halved the proportion of discounted sales over our peak trading period, benefitting both our margins and the Superdry brand. However this adversely affected our sales during the peak trading period given the level of promotional activity in the market. Despite this, our disciplined plan to reinvigorate the brand and return Superdry to sustainable long-term growth is on track.”
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