Returning SuperDry PLC (LON:SDRY) boss Julian Dunkerton has warned it “will take time” for his turnaround plan to be reflected in the bottom line.
His warning came as the coat maker cautioned the market that this year’s profits will be lower than expected, primarily as a result of the “weak wholesale and ecommerce performance”.
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Much of the mess is being blamed on the old board, which resigned en masse in April after shareholders voted to bring back Dunkerton, who had initially stepped down this time last year.
The 54-year-old has been back at the helm for five weeks but has already identified “immediate opportunities” to improve the efficiency and performance of the business.
He has made moves to increase the number of products sold online, put more stock in some of the bigger stores, and cut “unnecessary” promotional activity as part of a £50mln cost saving drive in a bid to prop up margins.
Dunkerton is also working on 500 new products which should hit stores within the first six months.
‘A lot to do’
“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,” said the “excited” chief executive.
“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 Ecommerce proposition, which are two important steps towards addressing SuperDry's recent weak performance.”
Dunkerton added: “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.”
Full-year revenue flat
Alongside details of the initial actions taken by the new management team, which includes former Boohoo Group PLC (LON:BOO) chairman Peter Williams, Superdry released its full-year update.
Group revenue was flat at £871.7mln (2018: £872.0mln) in the 12 months ended 27 April, although it fell off sharply in the final few months of the year.
That drop was driven by increased returns in the wholesale business, as well as fewer online discounts and sales compared with the year before.
Given the underperformance in those two divisions, Superdry expects profits to be below the £54.1-59.4mln range analysts had previously forecast.
The market didn’t appear to take much notice of the profit warning though, with shares rising 2.3% to 491.1p in early deals.