Returning Superdry Founder Slashes Value of Stores by $161M

CHELTENHAM, United Kingdom — The returning founder of Superdry warned it would take time to fix the struggling British fashion group on Wednesday after a £130 million ($161 million) charge for poorly performing stores pushed it into an annual loss.

Julian Dunkerton won a bitter battle to rejoin the board in April, prompting the resignation of all its directors. Also the biggest shareholder, he warned its performance in the new financial year would "reflect market conditions and the historic issues inherited."

Superdry said on Wednesday it made a statutory pretax loss of £85.4 million for the year to April 27 versus a profit of £65.3 million in 2017-18 year.

Superdry's underlying pretax profit slumped 57 percent to £41.9 million — at the bottom of the range of analysts' forecasts that have been cut after a string of warnings. Group revenue was flat at £872 million.

Superdry, whose shares have crashed 66 percent over the last year, said the non-cash onerous lease and impairment charges of 129.5 booked in its accounts reflected decreasing store revenues and its cautious recovery plan.

Dunkerton's initial focus has been on getting product ranges right and improving its e-commerce proposition. He has increased the number of products sold online, put more stock into flagship stores and cut back promotions to improve profit margins.

"The issues in the business will not be resolved overnight," said Dunkerton, the interim chief executive.

"Although we are only three months in, our initiatives are gaining some early traction, and I am confident we are doing the right things to ensure that over time Superdry will return to strong profitable growth."

Superdry ended the year with cash of £35.9 million, which it said supported the maintenance of its dividend policy. It proposed a final dividend of 2.2 pence, making a total of 11.5 pence.

By James Davey; editor: Kate Holton.