The impact of Covid-19 on our business to date
This year we have witnessed extraordinary events caused by the Covid-19 pandemic, which has had a substantial impact on a wide range of businesses and on the retail sector in particular. The welfare, health and safety of our stakeholders, and in particular our colleagues and our customers, has been our top priority, while taking decisive actions to protect the Group and its long-term financial position.
This financial year witnessed extraordinary events caused by the Covid-19 pandemic, which has had a substantial impact on a wide range of businesses and on the retail sector in particular. The welfare, health and safety of our stakeholders, and in particular our colleagues and our customers, has been our top priority, while taking decisive actions to protect the Group and its long-term financial position.
On 18 March 2020, in line with global government advice, we announced that we had closed 78 stores in Europe and that the previously advised financial guidance given by the Group on 10 January 2020 was to be withdrawn. By 22 March 2020, all Superdry stores in the UK, Europe and in the USA had been closed. We closed our Cheltenham head office on 23 March 2020 and those head office colleagues who had not been furloughed continued to work from home, fully supported by our IT team. We continued to trade online throughout the lockdown period, with effective operations continuing in our distribution centres with all appropriate measures taken to ensure the health and safety of our staff, while allowing us to continue to serve our customers.
By the end of June 2020, following local government guidance, after carrying out appropriate risk and health and safety assessments, and in consultation with colleagues, nearly all of our stores had reopened (the main exceptions being airports and a small number of our US stores). At the time of writing, our head office is making cautious preparations to reopen in line with UK government advice, but the majority of head office colleagues continue to work remotely where possible.
COVID-19 – Protecting suppliers and workers
We are fully committed to working with our suppliers to minimize the impacts of COVID-19 and to supporting all workers who make Superdry products to operate in fair and safe conditions.
We are working closely with suppliers to ensure they follow official guidance to protect the health of workers in factories. This includes measures like social distancing, the provision of appropriate personal protective equipment and sufficient ventilation.
We have worked in partnership with our suppliers to understand their financial situation, in order to navigate the effects of Covid-19 with care. In many instances, this has led to us paying our suppliers early. An example of this is our largest supplier who was paid within 30 days rather than the usual 60-day payment term, in view of their financial situation at the time.
Other than instances in which payment terms have been shortened to support suppliers, all payment terms have remained stable during the last year with no retrospective amends.
Whilst a small proportion of orders were cancelled in Spring-20, orders have been placed and fulfilled as normal in 2021. For those cancellations in early 2020, we worked with suppliers to re-use fabrics for in future collections.
Covid-19
Stakeholder Consideration In Action
Global store closures
Stakeholders impacted
Board consideration of our stakeholders
The impact of store closures on all of these
stakeholders was considered, but compliance with law and the health, safety and wellbeing of colleagues outweighed those concerns.
Donation of PPE to care homes in Gloucestershire
Stakeholders impacted
Board consideration of our stakeholders
The donation of PPE equipment was in line with our values.
Not paying a final dividend
Stakeholders impacted
Board consideration of our stakeholders
The decision not to pay a final dividend, which was in line with FRC guidance and seen widely across all business sectors, was taken in order to ensure the long term sustainable success of the Group.
Updates to investors
Stakeholders impacted
Board consideration of our stakeholders
Shareholders were kept fully informed of
performance and of the measures that the
Group took to preserve shareholder value
Measures to mitigate stock levels including the reduction of A/W orders
Stakeholders impacted
Board consideration of our stakeholders
The Board and Executive team took the necessary measures to reduce orders and stock levels of product as much as possible, while considering the long term impact of those actions on stakeholders
and preserving good relations with our business partners for the future.
Measures to carefully manage cash flow and reduce our operating costs
Stakeholders impacted
Board consideration of our stakeholders
The long term sustainable success of Superdry was dependent on the prioritisation of cash preservation measures during this p riod of
reduced revenue, as a result of the closure of our stores.
Decision to place colleagues on furlough
Stakeholders impacted
Board consideration of our stakeholders
All factors were considered when agreeing which colleagues were placed on furlough. This included: the levels of activity remaining; the Group’s financial position; colleague health and wellbeing. Line managers were consulted to ensure the best outcomes in the interests of Superdry and all colleagues.
Head office closures
Stakeholders impacted
Board consideration of our stakeholders
The impact of store closures on these stakeholders was considered, but compliance with law and the health, safety and wellbeing of colleagues outweighed those concerns.
Store reopening and head office reopening plans
Stakeholders impacted
Board consideration of our stakeholders
Stores were reopened in line with the law and government advice in each country in which we operate, ensuring the health and safety of our colleagues, our customers and business partners at every stage. The efficient, rapid and safe reopening of stores was essential for the future success of the
Group. Colleagues (including our SD Voice groups) were fully consulted and informed throughout the reopening process. A task force has been created to enable the reopening of our head office in the best
interests of colleagues.
Pay cuts for Board and Executive team
Stakeholders impacted
Board consideration of our stakeholders
The Board and Executive team wished to demonstrate their commitment to the future of Superdry
ColleaguesCommunity Customers Environment Government and Regulators MediaShareholdersSuppliersCovid-19
Factory Conditions
During the Covid pandemic we extended factory re-audit timelines to respect local operating requirements.
At the time of writing this report, our teams of dedicated ethical trading experts continue to work with factories to track conditions remotely –providing online training, and following up with interviews and systems assessments covering health and wellbeing, in line with local requirements and WHO Health and Safety guidelines.
Audit processes have been revised to account for additional Covid requirements, with monitoring restarting as countries relax lockdown measures.