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Posted on December 12, 2018 by staff

Profits plunge but Superdry hails tech investment

Half-year profits fell by more than £12 million after a “difficult” six months for the clothing retailer but the company praised the performance of its growing eCommerce platform.

Superdry blamed the results on “unseasonably warm weather” across major markets and a “consumer economy that is increasingly discount driven”.

The group also faced issues in its product mix and range, which it is currently addressing.

Underlying pre-tax profits fell by 49 per cent to £12.9 million for the 26 weeks to 27 October 2018, the company revealed this morning.

This was despite group revenue growing by 3.1 per cent to £414.6 million and global brand revenue rising by 6.4 per cent to £831.8 million.

Superdry enjoyed a “strong performance” in the Black Friday week but said its sales have remained under pressure due to the warm weather.

“This has resulted in an adverse profit impact of around £11 million in November and the company expects a potentially similar profit impact in December if trading conditions do not improve,” the group admitted in a London Stock Exchange statement this morning.

Alongside its financial results, Superdry also praised the performance of its eCommerce revenues, which grew by 6.9 per cent in the six-month period, underpinned by its own eCommerce site growth of 14 per cent.

The company added that its investment in technology has delivered market-leading online participation levels, “with our customers’ digital experience improved through 17 owned local language websites, all of which are optimised for mobile devices”.

“Despite achieving record sales figures over the Black Friday period, with 59k visits to the site in our busiest hour, we utilised less than 20% of the available capacity across our websites, enabling seamless customer experience with no slowdown in response times,” it said.

Superdry also commented on its use of RFID (radio-frequency identification) technology, which it says has now been rolled out across 30 of its stores.

“The technology has immediately benefited customer experience in these stores which are RFID enabled, through improved availability and accuracy of stock, and we will continue to see the working capital benefits of this as more stores implement RFID,” the company stated.

“We will roll-out the technology across the remainder of the owned store estate next calendar year, and remain on track to complete full implementation by autumn 2019.”

Looking ahead, CEO Euan Sutherland said he was confident that Superdry’s “transformation programme”, which involves diversifying its range of clothing and evolving its brand, would deliver a return to higher levels of growth and profitability.