What might have been a time for celebrations, as founder Julian Dunkerton finally hauled Superdry back into the black three years after returning to reverse the firm’s fortunes, has been tempered by a backdrop of significant financial challenges for the business.
Dunkerton credited his team with the Gloucestershire-based fashion brand's financial performance, but it is a sign of tough economic and financial pressures that a 9.6 per cent rise in sales to £609 million and annual adjusted profit of £21.9 million (after a £12.6 million loss the year before) did not receive more fanfare.
The Cheltenham plc’s statement to the city of London said it remained ‘cautious about the near future’, with the need to secure a new loan facility top of mind. It has used £40 million of a current asset-backed £70 million facility which runs out in January 2023 – with no replacement yet in place.
And in the immediate wake of the publication of its annual results it was also revealed the firm's long-standing auditor, Deloitte, had tendered its resignation.
Dunkerton, Superdry’s chief executive officer, said: ‘These are exceptional times for retail and for the economy more generally, and like all brands we’re having to work harder than ever to drive performance.
‘Against that backdrop, I am pleased that we managed to return the business to full-year profit, driven by increased full price sales, whilst also making strong strategic progress.
‘We are firmly on the journey to turn the brand around, and our clear and ambitious strategy will help deliver this.’
Social media reach, particularly TikTok, and a determined drive towards sustainably sourced materials, were at the core of the brand’s strategy, he said.
Favourable currency rates boosted the Cheltenham-headquartered firm’s profitability by £12.6 million, tough rental negotiations delivered £7.7m of one-off rent savings (a figure expected to rise to £10 million by the end of the year), and tighter stock control was also producing significant savings.
Dunkerton said Superdry was prepared to walk away from landlords it could not come to new agreements with; something it has done at 15 stores in the last 12 months.
There was also no final year dividend payment to shareholders. Given the ‘unprecedented levels of uncertainty' the group said it was focusing on 'cash preservation'.