Superdry sales drop as rescue plan slashes discounts
Superdry co-founder Julian Dunkerton still has kinks to hammer out as the business took a big hit to revenue while he bids to turn its fortunes around.
Mr Dunkerton, who rejoined the firm in April after some time away, oversaw a 11.7% revenue drop in the first half of the financial year.
But it is all part of a turnaround plan, Mr Dunkerton said, as his sights remain set on rehabilitating Superdry’s battered share price.
Shares bought for more than £20 three years ago are worth less than a quarter of that today.
Revenue was hit as the company slashed its reliance on getting customers through the door with discounts. Today 70% of its sales are made at full price, against 52% in the first half of last year.
This has helped Superdry push up its margins by 3.2 percentage points, which could boost the bottom line.
“We are moving the business away from a reliance on constant promotions, and while this focus on full price sales has affected revenue in the first half, this is being partially offset by a better gross margin performance,” Mr Dunkerton said.
The founder embarked on a two to three-year turnaround plan earlier this year after returning to head Superdry.
The 54-year-old left the company he helped set up while he was going through a divorce, and returned to the family tradition of making cider.
His re-appointment came after a bloody six-month battle with the board and then chief executive Euan Sutherland, who Mr Dunkerton ousted in April. The whole board resigned in protest to his re-engagement by the business.
He came back to Superdry, angered by a price drop that had wiped some £200 million off the value of the shares he held in the company.
The founder hit out at board members who he claimed were unable to understand Superdry, and has promised sweeping changes since taking charge.
“We are making good progress with the start to our turnaround plan for Superdry, returning the business to its design led roots. We have always said it will take,” Mr Dunkerton said on Thursday.
The changes have meant falling sales, but the rate of decline slowed to 9.4% in the second quarter, versus 13.9% in the year before.
Even online, which has been a bright spot for many struggling retailers, sales fell by 10.5% in the half year.
Shares rose 6% to 450p.