("Superdry" or "the Company")
18 March 2020
Current trading and COVID-19 update
Superdry, along with all other companies in the countries in which we operate, is facing unprecedented challenges arising from COVID-19. The welfare of our staff and customers is our priority and we have been taking all appropriate action to mitigate the impact of COVID-19 in line with local government advice, including temporarily closing stores in a number of countries. As trading is likely to be significantly impacted by such measures, it has become clear that the Company will not meet the guidance given on 10 January 2020. Accordingly the Company is no longer giving formal guidance in relation to the financial year 2020.
Following our trading update on 10 January 2020, prior to the global outbreak of coronavirus, our store estate was forecast to generate between £5-6m in sales per week for the remainder of FY20:
· As at today 78 stores across Europe are affected by government mandated closures. This accounts for the majority of our European store estate which contributes ~40% of weekly sales forecasts.
· In the UK and the US, stores remain largely open, but footfall has been significantly impacted, reducing on average ~25% week on week, as governments and customers take increasing measures to contain the spread of the virus. These key markets represent ~50% and 10% of weekly sales forecasts respectively.
Given the performance to date, we do not expect the decline in sales from our retail stores to be fully mitigated by sales through our Ecommerce channel, which remains fully open for business. Whilst we are also pursuing cost saving measures across the business, we do not expect these to be sufficient to offset the sales decline.
As at today we have a strong position of £47m net cash on our balance sheet. Also, our working capital performance to date has been better than our forecasts. We continue to work closely with our wholesale partners to minimize returns and cancellation risks on SS20 stock deliveries. Given the uncertain trading environment, we have stress-tested our forecasts under a range of disruption scenarios, and the Board is taking sensible measures to preserve cash, including, but not limited to, further cost actions (including negotiations with landlords regarding store rental relief), postponement of capex plans, and potential changes to the timing and structure of the future season stock buy. In addition we are in dialogue with our existing lending group to provide additional flexibility and liquidity to support Superdry through this period of uncertainty.
Julian Dunkerton, Chief Executive Officer, said:
"Along with everyone else, Superdry is experiencing major disruption to our business operations and recovery as we seek to protect our staff and customers from COVID-19.
We are taking mitigating action wherever we can but the situation is very fluid and uncertain, and we are working to put in place additional financing to secure our recovery. We also welcome the measures announced by the Chancellor yesterday to support UK businesses. The safety of our staff and customers remains our number one priority and we continue to take all appropriate action in line with local government advice. Together, we're going to make our way through this unprecedented challenge, and I'm confident we can reset the brand and deliver on our transformation plans."
For further information:
Nick Gresham firstname.lastname@example.org 44 (0) 1242 586747
Adam Smith email@example.com 44 (0) 1242 588187
Tim Danaher, Imran Jina firstname.lastname@example.org 44 (0) 2074 045959
Notes to Editors
Superdry is a global brand, obsessed with design, quality and fit and committed to relentless innovation. We design affordable, premium quality clothing, accessories and footwear which are sold around the world. We have a unique purpose to help our consumers feel amazing through wearing our clothes. We have a clear strategy for delivering continued growth via a disruptive multi-channel approach combining E-commerce, Wholesale and physical stores. We operate in 65 countries, including our development markets of North America and China and have over 4,800 colleagues globally.
This announcement contains certain forward-looking statements with respect to the financial condition and operational results of Superdry. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, Superdry has no obligation to update the forward-looking statements or to correct any inaccuracies therein.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for this announcement on behalf of Superdry is Nick Gresham, Chief Financial Officer.