Superdry has seen profit turn to loss
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Now, I don’t know about you but I’ve never been one to be all shouty about the clothes I’m wearing. The thought of having the brand emblazoned across my chest has never been that attractive a proposition.
Seems I’m not alone. Because a generation who grew up wearing the ‘Japanese’ branded Superdry clothing (of course, we know it was born in Cheltenham) – and feeling ultra-cool in doing so – are now deserting it in their droves.
From profits of £65.3 million to a pre-tax loss of £85.4 million announced earlier today, for the once super trendy brand, best known for its jackets and hoodies, the harsh reality of the new consumer driven world of fashion has come as a sharp shock.
Shares dropped more than 4% on Wednesday as the City digested the news.
This is an aggressive turnaround. This year is a year of stability with small moves forward but in 12 to 24 months you will see much more progress
Julian Dunkerton
The boardroom travails at Superdry are well known, resulting in the mass exodus of previous chief executive Euan Sutherland and his team, to be replaced by the returning founder of the business Julian Dunkerton, in April this year.
Using a tried and tested retail strategy of being publicly scathing of the previous management team, Dunkerton has a huge task on his hands to restore the brand to the position on the high street it, until recently, enjoyed. Because, even in the time since March 2018 when Dunkerton left the business, the pace of change and consumer demands in the fashion world have been nothing if not rapid.
Which begs the question of not when but if he can restore success to the brand.
And building on that style for any new retail chief executive, he claims that performance in the new financial year will “reflect market conditions and the (historical) issues inherited”. In other words, performance is likely to fall still further.
“The issues in the business will not be resolved overnight,” Dunkerton said. “Although we are only three months in, our initiatives are gaining some early traction and I am confident we are doing the right things to ensure that over time Superdry will return to strong profitable growth.”
The Problem For Superdry
I decided to put that claim to the ultimate test today by asking a group of (mainly girl) teenagers I met in London what they thought of Superdry. The responses were revealing and in some cases, surprising.
Much of what they said bore out my initial suspicions that the typical Superdry customer has simply moved on to find alternative brands. Why? Because they got fed up wearing clothes their whole family were also wearing. This is a key issue for Superdry. After all, which self-respecting teenager is going to be seen wearing the same gear as their parents?
In order to succeed then, Dunkerton is going to have to restore a large dollop of street-cred to the brand and have a laser sharp focus on who the Superdry customer really is. But that’s not all. According to the teenagers I spoke to, Superdry has become a ‘bit like Hollister’. In other words, a brand which was once trendy but has now become ‘a bit long in the tooth.
But the real surprise came when I asked the group where they prefer to shop. As expected, ASOS featured ‘because there’s always something new to try’ along with Urban Outfitters and the creative social shopping app Depop. But the list contained one other which came as a surprise: Topshop.
Contrary to received wisdom for many, according to the group I spoke to, Topshop remains one of their go to destinations for today’s fashion wear, for girls at least.
Which rather means that a revival of Superdry is not entirely out of the question. The only thing is, it just has to stock product that doesn’t appeal to Mums and Dads.
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