(Reuters) - Superdry warned again of a shortfall in annual profits as founder Julian Dunkerton began aggressive moves to reform how the British fashion retailer is run after winning control in a bruising boardroom battle.
Superdry had issued a string of profit warnings, the latest in December, and its shares have slumped 75 percent over the last year, as it struggled to expand beyond its trademarked winter hoodies and jackets and demand fell in its wholesale and ecommerce business.
Investors voted to hand back operational control of the company to Dunkerton in April. Dunkerton’s return prompted the exit of most of its board members and his appointment as interim chief executive officer.
Dunkerton set out the initial stages of his plan to revive the retailer’s fortunes, including moving 17 million garments out of the warehouse to online stores and shop shelves.
“I have been taking a forensic look at the business ... there is an enormous amount we can do straight away to improve the retail basics,” Dunkerton said.
“We are not hanging around, we are getting on with the job. While this is a poor trading update, to me it simply shows why change is needed,” added Dunkerton, who founded the company with a partner in 1985 in the western English town of Cheltenham.
Superdry owns a network of 139 stores across the UK and mainland Europe, and has a further 208 franchised and licensed stores, all but one outside the UK.
“I took down all the ... multiple offers there were in outlets. What happened? Gross margin went up and gross sales went up,” said Dunkerton, who indicated he would strengthen his management team before seeking a permanent CEO.
He has also cut promotional activity, helping margins, and expects to launch 500 new products over the first six months, working closely with creative and design team.
The company said it would miss market expectations for underlying pretax profit for the year to April 27 which had been seen in a range between 54.1 million pounds to 59.4 million pounds. It had guided to profit of between 55 million pounds and 70 million pounds in December.
“Previous management can shoulder much of the blame for this latest shambles ... The big question is whether Dunkerton’s spectacular return to Superdry will reap spectacular results,” Cityindex analyst Fiona Cincotta said.
Shares in the company initially fell as much as 8 percent before recovering to trade higher as investors welcomed his plan for the business.
The company is also on the lookout for a new bosses and other board members.
“What we’re doing first is the CFO and the HR and we’re steadying the ship here and getting the strategy correct before the CEO search and then we’ll do that,” Dunkerton added.
Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Patrick Graham/Keith Weir
Our Standards: The Thomson Reuters Trust Principles.