Yahoo Finance Superdry warns lockdown casts 'significant doubt' on its future as sales plummet
Fashion retailer Superdry (SDRY.L) sounded the alarm on Tuesday as COVID-19-related lockdowns hit its sales.
It reported a wider first-half drop and a significant drop in sales from its Christmas quarter as stores faced up to new restrictions.
The retailer said the virus, coupled with weak consumer demand, meant "a material uncertainty exists and may cast significant doubt on the group's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business."
Shares dropped by nearly 8% at market open in London, recovering slightly to trade at around 7% lower shortly after.
Revenue for its first half was down 23.3% to £282.7m ($384.4m). It was also down 27.2% in the crucial Christmas period — the 11 weeks leading up to 9 January.
It made an underlying pretax loss of £10.6m in the six months ending 24 October. The same period in 2019 saw a loss of £2.3m.
Nearly a quarter (23%) of in-store trading days were lost in the first half of the year, and 38% were lost in the latest quarter due to lockdowns.
Retailers’ footfall has also taken a hit due to social distancing requirements and new measures.
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Julian Dunkerton, founder and CEO, said: "While revenue and underlying profit have been impacted by the external conditions, the brand has continued to focus on the reset, however, with over 70% of stores currently closed and having to shut a significant number over peak, it will take time to see the benefits of all our hard work flow through to the results.”
E-commerce sales were Superdry’s saving grace for this financial report as online sales partially offset lost store sales. Online shopping accounted for half of its retail revenue in the first half.
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