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Superdry falls on Covid-19 warning
Superdry’s (SDRY.L) stock crashed 18% on Wednesday after warning of severe disruption to its business due to Covid-19.
The struggling fashion chain said it is “facing unprecedented challenges arising from Covid-19” as it abandoned its guidance for 2020 performance.
Superdry said 78 stores across Europe that contribute 40% of continental sales are currently shut due to government containment measures. In the UK and US, stores remain open by traffic has declined by around 25%.
As a result, sales will be “significantly impacted” and cost cutting measures won’t be enough to offset the slump.
Superdry said it has £47m of cash on hand and chief executive Julian Dunkerton said the. company is “working to put in place additional financing to secure our recovery”.
“The safety of our staff and customers remains our number one priority and we continue to take all appropriate action in line with local government advice,” Dunkerton said.
“Together, we're going to make our way through this unprecedented challenge, and I'm confident we can reset the brand and deliver on our transformation plans."
Superdry’s share price slump made it one of the worst performers on the FTSE all-share index.
Supermarket stocks rose in a falling market on Wednesday, as major chains put in place extraordinary measures to ensure the nation gets fed during this national crisis.
Sainsbury’s announced a three-item limit on all of its grocery products on Wednesday and a two-item limit on its most popular products, including toilet paper, long-life milk and soap.
Sainsbury’s stock was up 6.6%, while Tesco was up 1%.
Morrisons (MRW.L) separately announced a raft of measures aimed at of new measures aimed at supporting staff through the outbreak of novel coronavirus and ensuring the country continues to eat during the national crisis.
The supermarket on Wednesday: launched a ‘hardship fund’ for staff; announced an expansion to its home deliver partnership with Amazon; unveiled plans to hire 3,500 more staff; and said it would guarantee fast payment to suppliers.
It came as Morrisons published its full-year results. Total revenue fell by 1.1% to £17.5bn in 2019, but pre-tax profit rose by 3% to £408m. The numbers were roughly in-line with forecasts. The stock rose 5%.
European stocks fell on Wednesday even after governments in the UK, France, Spain, and the United States announced a series of new stimulus measures designed to curb the economic impact of the spiralling coronavirus pandemic.
UK chancellor Rishi Runak on Tuesday announced £330bn in state-backed loans to coronavirus-hit businesses, equivalent to 15% of GDP.
Sunak also pledged a further £20bn in stimulus measures, including the suspension of business rates for swathes of firms.
HSBC (HSBA.L) confirmed late on Tuesday that interim chief executive Noel Quinn is being given job on a full-time basis.
Chairman Mark Tucker said Quinn, who has led the bank since August 2019, was an “outstanding candidate to take on a role permanently”.
“He is a strong and proven leader with extensive global banking expertise, deep client relationships and the energy and skill to drive the business forward at pace,” Tucker said.
Quinn said: “There is much that remains to be done and I am confident that we will rise to the challenge and deliver for our shareholders, customers, employees and society at large.”
He added that he was “honoured” to take the job on full-time basis and said: “HSBC is an outstanding global company with talented and dedicated people.”
The Restaurant Group (RTN.L), the owner of 650 restaurants and pub restaurants throughout the UK, is planning to cut costs and warned that its business will be “significantly impacted” amid the coronavirus pandemic.
The group, which owns well-known restaurants such as Frankie & Benny's, Wagamama, and Chiquito, said in a statement that it before the period of the pandemic, group like-for-like sales for the first eight weeks of the financial year were up 4.5%.
However, in the last two weeks, it has “seen an increasing and material impact of Covid-19 across our businesses with Group like-for-like sales being down 12.5%.
“In particular, our Concessions business has been significantly impacted with like-for-like sales down 21.7% and getting worse by the day given International travel bans.”
It is therefore going to be cutting cost for 2020 by at least £45m ($54m), from the previous guidance of £75m.