Advertise with fastmoving.co.za
 
 

Superdry shares plunged more than a third after the British fashion chain warned on profits for the second time in less than three months.
Superdry shares plunged more than a third after the British fashion chain warned on profits for the second time in less than three months.

Superdry blames warm weather as shares plunge on warning

INTERNATIONAL NEWS

Business Live - Dec 14th 2018, 10:02

Superdry shares plunged more than a third after the British fashion chain warned on profits for the second time in less than three months, blaming unusually warm weather for hitting sales of winter jackets and jerseys. 

The company, which has been striving to reduce its reliance on winter clothing, said it will look at closing or relocating stores and renegotiating rent to save at least £50m by 2022.

The warning came as bigger rival Inditex also blamed an abnormally warm September in part for missing third-quarter profit forecasts.

Superdry said a “difficult trading period” knocked £11m off profit in November and it expects to take another hit in December if trading conditions do not improve.

It said its underlying profit before tax could almost halve to £55m-£70m in the year ending April 2019, compared with the £97m made in 2017/18.

Liberum analysts said the market consensus prior to the latest warning was £87m.

Superdry shares were down 33.6% in early-morning trading at 380.3p, after touching a six-year low of 373.6p.

“The group’s ongoing significant underperformance versus its potential, including its margin contraction, reflects more than just tough market conditions and weather impacts,” the Liberum analysts said, adding the company’s strategy appears to be limiting choice online and buying more of a narrower range of goods rather than buying fewer of a larger range.

Co-founder Julian Dunkerton, who left the company in March and has been pushing to return, also voiced criticism of the company’s strategy in an interview with Liberum earlier this week.

The company said the board has considered and rejected Dunkerton’s concerns.

“From the board’s point of view, it has been since Julian’s departure that the management team has had the capacity and the freedom to be able to innovate,” a company executive said.

Launched as a clothing stall at Cheltenham market, Superdry has been striving to diversify from its trademark hoodies and tops into dresses, skirts, women’s tops and denim, as well as expanding into premium, sports and licensed goods.
Business Live 

Read more about: superdry | shares | retailer | retail | profit | fashion retail

Related News

Woolworths bedeviled by declining sales
18/01/2019 - 10:35
As Woolworths tries to recover from the impairments of A$712.5 million (R7.02 billion) it suffered last year in its Australian subsidiary David Jones, the retailer continued to experience declining sales in the 26 weeks to end December trading period in South Africa.

TFG bucks retail trend over festive season
18/01/2019 - 08:00
Apparel group TFG, which operates the Foschini, American Swiss and Markham chains, has bucked the retail trend and produced solid growth numbers for the festive season.

Edcon gets some breathing space
17/01/2019 - 10:34
Edcon is at a turning point yet again. The retailer — which operates the Edgars, Jet and CNA chain stores — has just wrapped up a deal with 250 stakeholders, including its shareholders and landlords, in a bid to keep its doors open.

M&S confirms more store closures
17/01/2019 - 08:41
Marks & Spencer confirmed the location of the next batch of stores it plans to close as part of its restructuring plans.

Black Friday boosts November’s retail sales
16/01/2019 - 14:12
Consumers came under pressure in 2018, with the first VAT hike in two decades and steep fuel price increases.