Profits and sales at Superdry (SDRY.L) slid over the last six months, as the brands new CEO tried to pull the clothing brand more upmarket.
Superdry said on Thursday that revenue fell 11% to £369.1m in the first half of its financial year. Underlying pre-tax profit crashed 98.4% to £200,000.
The business lost £4.2m in the 26 weeks to the end of October on a statutory basis, compared with a profit of £26.4m in the same period last year.
“At this halfway point in our financial year, I am pleased with the progress we have made to comprehensively reset Superdry,” founder and chief executive Julian Dunkerton said in a statement.
“We're doing this through our product and brand, our physical and digital retail operations, and a renewed focus on the retailing basics.”
Dunkerton cofounded Superdry in the early 2000s and left as CEO in 2014. He was unhappy with the work of his successor, Euan Sutherland, who led a revamp of the brand that sparked a sales slide.
After a six month campaign to regain control of the company, Dunkerton was appointed CEO in April this year and vowed to once again overhaul the business. He has ended Superdry’s reliance on discounting to boost sales and is refocusing on product design.
“We are only eight months into a process that will take two to three years, but I have great confidence in the strength of our new executive leadership team,” Dunkerton said Thursday.
Superdry said it had its biggest ever Black Friday sales day and Dunkerton said he’s “pleased with the trajectory of performance.”
“However, we remain cautious about the challenging market conditions over the peak trading period,” Dunkerton said.
The company warned that sales were likely to continue to fall in the second half of its financial year and it will take £10m in charges in the first half of 2020. The company also booked £13.9m of charges related to inventory and debt recoverability in the first half of its financial year.
Shares fell 3.6% in early trade.
Nick Bubb, an independent retail consultant, said: “After the Ted Baker warning on Tuesday, investors in Superdry will have been nervous about what another premium fashion retailer would say about current trading, but today’s interims don’t look quite as bad as expected and the start to Q3 is said to have been “encouraging”, despite the inevitable caution about the short-term outlook.”