Superdry, the UK fashion retailer, has warned on profits, blaming “abnormally mild” weather for a drop in sales.
In an unscheduled trading update, the struggling retailer said retail sales fell 13% year on year in the six months to 28 October, its first half, because the mild weather meant customers were slow to buy its autumn and winter clothes.
Shares fell as much as 32% after the update to a record low of 28p, before recovering some ground to 36p, down 15% on the day.
Superdry said its trading had been “significantly below management expectations” and that profits for the year would reflect this weaker trading. It did not quantify the likely impact.
Online sales were also affected by reduced spending on digital marketing. Wholesale sales plunged 41% in the first half, partly because Superdry exited its US operation.
The retailer said sales had picked up but were still down 7% on a like-for-like basis (at stores open at least a year) for the six weeks since the end of October.
Superdry had previously blamed lower demand for its spring-summer collection on poor weather and weak orders from wholesale partners, which remained cautious about stock levels and liquidity as shoppers cut back on spending amid the cost of living crisis.
The company swung to a near-£150m loss in September and temporarily suspended its shares. They have fallen more than 60% in the past year.
Julian Dunkerton, the Superdry founder and chief executive, who returned in 2019 to try to turn the business around, 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. While 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.”
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The company has taken action, including a £35m cost-cutting drive with head office redundancies, and the sale of the rights to its brand in some Asia Pacific countries in a deal with the South Korean firm Cowell Fashion Company that has generated £28m.
Superdry also turned to Hilco, the specialist retail investor, for a £25m loan at a hefty interest rate of 10.5% plus the Bank of England base rate.
As part of its turnaround, the company said it was closing stores and renegotiating rental lease terms with its landlords.
