Return of Superdry boss sparks hope of a revival
STRUGGLING fashion retailer Superdry has begun to worm its way back into investors’ favour, despite issuing yet another profit warning.
Shareholders seemed hopeful that its returning founder Julian Dunkerton, who pushed his way back into the company five weeks ago after orchestrating a boardroom coup, might be able to work some magic and boost Superdry’s flagging sales.
Revenue was flat for the year ending April 17 at £871.7m – but showed a worrying 4.5pc decline in the last quarter. The retailer admitted profit would be below market expectations.
Superdry blamed poor performance in its wholesale division, where its clothes are bought by department stores and other retailers to be sold in their shops.
Dunkerton said too much discounting in Superdry’s own outlets had led to reduced orders from wholesalers, although the company was also hit by its decision to stop sending products to several overseas retailers who already owe Superdry significant amounts. Knock- off pricing pushed down online revenue, while instore revenue slid 3.7pc to £ 373m year-on-year.
Dunkerton, who had loudly criticised Superdry’s former management for their ‘misguided strategy’, said: ‘I am very excited about being back in the business.
‘There’s a lot to do, but after five weeks I am more confident than ever that we can restore Superdry to being the design-led business with strong brand identity I know it can be.’
The driven boss said he wanted to increase the number of options sold online, fill flagship shops with more stock, cut back on promotions and design 500 new products in the next six months. Shares jumped as high as 4.9pc, before settling up 0.2pc, or 0.8p, at 481p.
But shareholders weren’t so hopeful for The Works. The discount crafts and stationery chain plunged 18.5pc, or 22p, to 97p, as it warned profit would be at the lower end of expectations.
Even though revenue was up 13.2pc in the year to April 28, and use of its online click-and-collect service took off, The Works has fallen foul of the declining mood on Britain’s High Streets. It said sales growth was likely to slip, after a year in which it cashed in on its eighth consecutive record Christmas period.
Shares in Centrica, the owner of British Gas, also took a battering as it began trading ex-dividend – meaning anyone who buys a Centrica share now will not be paid the latest dividend when it is handed out in June.
The energy giant was down by 10.3pc, or 10.8p, to 94.2p – its lowest level in 20 years. The dramatic tumble implies investors are doubtful that Centrica, which is due to pay an 8.4p dividend per share this year, will hand out such a generous sum in the future.
The firm is struggling to maintain profitability after the Government introduced a cap on household energy bills, and it is battling to simplify its sprawling business.
Its poor performance dragged the FTSE 100 down by 0.9pc, or 63.59 points, to 7207.41.
Insurance firm RSA Group, which owns brands such as More Than, did a little to boost the blue-chip index as chief executive Stephen Hester said it was ‘on track’ to improve its underwriting. The company suffered from high weather-related claims in 2018, but has now withdrawn from certain business lines. Shares edged up 2.3pc, or 12p, to 546.4p.
Elsewhere in insurance, Beazley was knocked by an increase in claims. It particularly had to pay up for Typhoon Jebi, which hit Japan, and the Woolsey wildfire in California. The FTSE 250 firm ended down 4.3pc, or 24p, at 538.5p.