Superdry warns over profits as warm autumn chills sales of winter ranges

The update from the fashion chain sent its share price tumbling by about a fifth on Tuesday morning, hitting about 30p per share, the lowest level since it began trading in 2010.

A warm spell across the UK and Europe during September spoiled sales for the brand, known for its jackets and hoodies.

Retail sales fell by 13 per cent over the six months to the end of October, with shopping impacted by the weather as well as a later start to its end-of-season summer sale.

Online shopping was also affected by the group reducing spending on digital marketing, it said.

Wholesale, where the business sells its products to other retailers, tumbled by more than 40 per cent year-on-year, which Superdry said was partly expected after deciding to exit its US operations.

Despite colder temperatures sweeping the continent in recent months, it revealed that sales remained down by about 7 per cent over the past six weeks, compared with last year.

Trading has been “significantly” below expectations, and profits for the year are expected to reflect the weaker sales, Superdry warned.

Julian Dunkerton, founder and chief executive of Superdry, said: “Whilst we have seen modest signs of improvement through the recent spell of colder weather, current trading has remained challenging, and this is reflected in the weaker than expected business performance.”

Mr Dunkerton returned to lead the retailer in 2019 after a boardroom battle which saw him criticise the previous management for presiding over the chain’s decline.

In September, Superdry reported deepening losses after reflecting on an “exceptionally challenging” year, with it agreeing to borrow more than £100m from lenders over the past year.

It is in the middle of a turnaround plan to improve performance, and is on track to make £35m in cost savings within the latest financial year.

The firm also received about £30m from the sale of its South Asian intellectual property assets, after agreeing to a joint venture deal with Indian retailer Reliance Brands.

Earlier this year, Superdry said it was closing eight UK franchised stores but denied that the move was part of its cost-saving efforts.

There is growing evidence that consumer spending remains under pressure. More than a quarter of people in the UK are worried about affording their Christmas plans, as households look to cut down on spending this festive season, according to a recent survey.

Some 28 per cent reported feeling worried about being able to afford things they planned to do this Christmas, the Office for National Statistics (ONS) found. Households feeling the squeeze as living costs continue to rise have been taking action to manage spending during the typically busier shopping season.