Superdry loses fourth finance boss in five years as losses widen
Superdry has parted ways with its fourth finance boss in five years as losses widen at the troubled UK fashion brand.
The company said Shaun Wills, who has been the finance director for three years, is leaving the business and being replaced next week by the interim finance boss Giles David.
Wills was preceded this time around by the interim finance boss Benedict Smith after Nick Gresham left in October 2020, less than two years after taking over from Ed Barker. Wills was on his second stint as Superdry’s finance boss, having first left the business in 2015.
David has previously worked at the struggling businesses McColl’s and the Casual Dining Group, both of which fell into administration. Superdry said he had a “strong track record in consumerfacing businesses where he has operated successfully in turnaround environment”.
Superdry warned it was facing another tough year in which it expected results “to reflect the more challenging environment seen to date”.
In delayed half-year results published on Friday, the company said sales fell 23.5% in the six months to 28 October. In the following 12 weeks to 20 January, sales were down 13.7% led by a 38% dive in wholesale sales.
The group dropped to a loss of £25.3m in the half-year, before a £36.3m one-off benefit, principally the sale of its brand rights in south-east Asia. A year before, the group made a £13.6m underlying loss.
Superdry said its sales had been affected by the “milder autumn that persisted through the peak Christmas trading period”. It added that weak consumer demand had also led to “heavy discounting across the sector”. The company had warned before Christmas that profits would be affected by the mild weather but did not give a figure.
Julian Dunkerton, the founder and chief executive who returned to Superdry via a boardroom coup in 2019 to try to turn the business around, said: “This has clearly been a difficult period for Superdry. A challenging consumer retail market, set against a backdrop of macroeconomic uncertainty and some remarkably unseasonal weather conditions have all combined to weaken the financial performance of the group.
“These macro and external factors have been further exacerbated by the underperformance of our wholesale segment. While, to some extent, this was expected due to the decision to exit our US operations and the sale of the brand rights in non-core territories, the segment continues to prove challenging.”
He added that the group had made “significant operational strides” despite its “near-term difficulties”. Wholesale sales were affected by a decision to exit the US and “structural changes to the broader market” such as the closure of many department stores.
Superdry said it had stepped up efforts to save costs as it remained almost £29m in debt at the end of its half-year, an improvement from the £38m of net debt a year before.
The company now expects to make £40m in savings this financial year, £5m more than previously expected. It is also looking to sell its brand rights in further territories and sell off old stock in order to raise cash to reduce its debts.
Russell Pointon, the director of consumer and media at Edison Group, said:“Today’s results, against the backdrop of the recent profit warning and the announcement of PwC’s involvement in reviewing debt-raising options, underscore the magnitude of challenges Superdry confronts in its quest for financial stability.”
The widening losses and falling sales continue a tough period for the brand, which has been struggling to engineer a turnaround for several years.
It is understood that it hired the advisory firm PwC before Christmas to review options for handling its debts, with the company saying on Friday that “cash management remains a critical focus area for the business”.
By 23 January the group had just under £34m in cash and undrawn debt facilities of £12.4m.
In May last year, the company
raised about £12m from shareholders including Dunkerton before turning to restructuring specialist Hilco in the summer for a £25m loan at a hefty interest rate of 10.5% plus the Bank of England base rate. That came on top of a £80m facility from the specialist lender
Bantry Bay agreed in December 2022, currently capped at £60m, with £30m of that to be repaid within three years.