Superdry China Joint-Venture Companies Lose Their Ability To Catch Up With Young People.

Britain's fashionable retail environment is sluggish and Superdry has not been spared.

In the 12 months ended April 27th, the total revenue of Superdry in the UK was basically flat at 872 million pounds in the previous fiscal year, and the gross profit margin declined from 58.1% to 55.6%, and the basic pre tax profit dropped 56.8% to 41 million 900 thousand pounds from 97 million pounds.

According to the fashion business express data, in the first half of last October 27th, Superdry revenue still recorded a growth of 6.4% to 832 million pounds, which meant that the sales performance of the brand in the second half of the fiscal year was negative, which once again triggered the industry's concerns about the brand outlook.

By channel:

Sales of brand retail outlets fell 2.2% to 536 million 700 thousand pounds, of which retail sales from offline stores fell 2.2% to 537 million pounds, while electricity business retail sales rose 1.6% to 163 million 700 thousand pounds.

By Region:

Brand sales in the biggest British and Irish markets dropped by 8.2%, mainly affected by the downturn in offline stores and e-commerce business, while revenues in other parts of Europe increased by 4.7%. Sales in the North American market also grew strongly, but the loss expanded to 12 million pounds. The joint venture between Superdry and Hechi group in China expanded to 3 million 700 thousand pounds, or about 31 million 840 thousand yuan, and a 3 million loss in the previous fiscal year.

JulianDunkerton, co founder and interim CEO, said in the 2019 fiscal year report that despite the increase in brand sales in the first half of last year, despite the increase in discounts and store expansion, the performance of all channels in the second half of the year has been in the doldrums, even if sales were not expected during the holiday season.

Superdry parent company, formerly known as Cult Clothing group, was founded in 1985 by Ian Hibbs and JulianDunkerton in Cheltenham. In 2003, the group opened its first Superdry store in Covent, London, and began to accelerate its global expansion. It had worked with international giants such as Beckham, Jude Law and Kate Moss, and was officially listed on the London Stock Exchange in March 2010.

In January 2018, in order to further promote Superdry to become a more comprehensive lifestyle brand, the group was changed from Super Group to Superdryplc, and another brand Superdry Sports of the group has been completely stripped of its main business.

As a result of disagreement with the board of directors, JulianDunkerton resigned as CEO in October 22, 2014 and left the board in March last year, and began to focus on philanthropy and other businesses. Surprisingly, in October of last year, JulianDunkerton, who had quit the board of directors, decided to return to the board because of the management strategy of the original management team, and dismissed the former chief executive, Euan Sutherland.

JulianDunkerton said that the low weather, the change of consumer shopping attitude and the fluctuation of exchange rate were not the main reasons for the low performance of Superdry. The root lies in the erroneous strategic decision. "It is a mistake to reduce the product line when the competitors increase production, and I will not sit idly by for the brand that I built up with 30 years of effort."

In addition to earnings, Superdry launched the first brand new reinventing strategy.

Careful observation is not difficult to find that Superdry's situation is very similar to that of British brands such as Topshop and NewLook, which have been submitted to CVA voluntary bankruptcy agreement, and are deeply troubled by many problems, such as oversized Internet stores, old brand image, and no novelty in product design.

In order to avoid repeating the mistakes of other brands and leading Superdry to get out of difficulties as soon as possible, JulianDunkerton released a new brand strategy for investors at the same time. In terms of product and design, Superdry will focus on design and create clearer consumer segmentation.

In terms of channel, Superdry plans to plan and adjust the retail store network reasonably, enhance the shopping experience in the store, and increase the frequency of updating the products and the type of products. It is reported that 40% of Superdry's store tenancies will expire in the next 2 years, and 70% of the store tenancies will expire in the next 4 years.

At the same time, Superdry will set up a professional team to make full use of Instagram and other social media, which are popular among young people, to rebuild the brand image, so as to establish a long-term and stable emotional connection with young consumers. JulianDunkerton stresses, in addition to globalization, how to localize marketing in different markets is also crucial.

At the beginning of this year, Superdry suddenly released the cost reduction plan, and the headquarters will lay off 200 people, aiming to achieve the goal of saving 50 million pounds in three years. It is reported that the group is currently negotiating with employees about unemployment. JulianDunkerton frankly, the problem of Superdry can not be solved overnight.

Peter Williams, chairman of the board, said that she was disappointed with the performance of Superdry in the 2019 fiscal year. But since JulianDunkerton returned to China in April, it has shown signs of improvement. With the help of the new transformation strategy, Superdry still has great market potential to be explored.

Given that the 2020 fiscal year will be a critical period for brand transformation, Superdry is cautious and expects sales to continue to decline. But by reducing discounts and other measures, profitability is expected to resume growth as soon as possible.

Since the beginning of this year, Superdry's stock price has fallen by 17%, and its market value is about 360 million.