Superdry issues fresh profit warning as shake-up begins

Superdry has issued a fresh profit warning following a bruising battle that saw its management team quit when co-founder Julian Dunkerton won a shareholder vote to return to the business.

The struggling fashion retailer issued a statement covering its fourth quarter to say a combination of factors would mean underlying profit before tax for the 2018/19 financial year would not meet current market expectations of £54.1m-£59.4m.

It blamed a combination of factors - weeks after shareholders narrowly voted in favour of allowing Mr Dunkerton to return to the board.

The contentious vote - marred by claims of dirty tricks - was opposed by then chief executive Euan Sutherland and others.

Mr Dunkerton's victory resulted in a mass exodus at the top , allowing him to take control as interim chief executive and Peter Williams, chairman of Boohoo, to be chairman.

Both, who had been deeply critical of the company's strategy, warned on Thursday that efforts to turnaround a poor trading performance would take time.

Superdry said its profit warning, the third covering its last financial year, was down to "weak wholesale and e-commerce performance, along with other measures to deliver the new operational strategy".

The statement said: "As a result of the store portfolio review announced by the company on 12 December 2018, the company will make a non-cash onerous lease and store impairment provision.

"Given the management transition and the consequent need to update the company's longer term strategic plans, the review has not yet been finalised but will have an impact that benefits both FY19 and subsequent years.

"Further details will be provided at the full year results announcement on 4 July 2019."

It reported that full-year group revenue to 27 April was flat on the previous year at £872m - with store sales the only bright spot in the fourth quarter showing 2.2% growth.

Wholesale revenue was more than 9% lower on the same period last year while its online sales were 4% down.

Shares, down 68% over the past 12 months, fell by a further 5% at the market open as investors digested the latest update.

They later recovered after the company confirmed it was actively hunting a new chief executive and directors, and closed little changed on the day.

Superdry said a series of actions to bolster its offering had already been taken, including repopulating selected flagship stores with a greater density of stock, reducing unnecessary promotional activity and adding 500 new products.

Mr Dunkerton 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.

"My first priority has been to stabilise the situation, and all of us in the business are putting all our energy into getting the product ranges right and improving the e-commerce proposition, which are two important steps towards addressing Superdry's recent weak performance.

"The impact of the changes we are making will take time to come through in the numbers but I'm confident we are heading in the right direction."

Commenting on the trading performance senior market analyst at City Index, Fiona Cincotta, said: "The silver lining for Julian Dunkerton from these poor sales figures is that they help support the notion that a change at the top was necessary.

"The Superdry co-founder was only named interim chief executive's on 2 April, so previous management can shoulder much of the blame for this latest shambles."