Superdry warns over going concern risks as Covid-19 hurts sales

The fashion retailer Superdry has warned over its ability to continue as a going concern as multiple coronavirus lockdowns across the UK continue to hammer sales and profits.

Its shares fell 11% on Tuesday after Superdry issued the warning and said revenues fell 52% in the 11 weeks to 9 January, due to store closures during the weeks before and after Christmas.

It said: “The group directors noted that the risks set out … indicate that 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.”

As of 9 January, 173 stores were temporarily closed, 72% of the total. The company posted a pretax loss of £18.9m in the six months to 24 October on revenues of £282.7m, against a £4.2m loss a year earlier.

However, Superdry said its directors had a “reasonable expectation” that it had sufficient resources to continue to operate for the foreseeable future, and it would be able to operate within its borrowing facilities and covenants for at least 12 months.

Julian Dunkerton, the co-founder who returned in a boardroom coup in April after the business foundered in his absence, said: “Covid-19 has brought substantial challenges to Superdry as with many other brands, and this has continued through the first half and into the second with renewed lockdowns in our key markets.

“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.”

Online sales were up 13.2% over the 11-week period, offsetting some of the store losses.

Superdry hopes its revival will be aided by a three-year partnership with the Brazilian football star Neymar Jr, who will front the launch of its 100% organic underwear and sleepwear collection.