Superdry is boosting its liquidity as it continues to navigate the coronavirus pandemic.
The United Kingdom-based retailer announced today that it has received 70 million pounds, or roughly $91.5 million at current exchange, through a new lending facility with existing lenders HSBC and BNP Paribas. The credit runs through January 2023.
Along with the announcement, Superdry reported that its first-quarter revenues for the three months ended July 25 had slumped 24.1% from the prior year period — largely due to the impact of widespread store closures during government-mandated lockdowns. The company, however, added that the decline wasn’t as severe as forecasted.
“Current trading in the first quarter has been better than our initial expectations,” it wrote in a statement. “However, disruption from COVID-19 continues to materially impact our performance year-on-year.”
Superdry began a gradual reopening of its brick-and-mortar fleet at the start of the 2021 fiscal year. Today, about 95% of its units are back in business. According to the retailer, store revenues were down 58.1% in the first quarter, or a 32.3% drop on a like-for-like basis, while e-commerce sales were up 93.2%. (Online sales, it shared, have started “normalizing” in recent weeks as outposts continue to reopen.)
“The actions we have taken to date have greatly strengthened our cash position, which — together with our new asset-backed lending facility — give us the flexibility to execute our current plans and to secure our recovery,” CEO Julian Dunkerton added. “Together, we are making our way through this unprecedented period, and I’m confident we can reset the brand and deliver on our transformation plans.”
Over the past few years, the U.K.’s brick-and-mortar sector has been facing pressure stemming not only from relatively high taxation rates and fixed costs, slow sales growth, heavy price competition and the rise of e-commerce — the latter of which has accelerated amid the coronavirus crisis. Nonessential retailers across the country were forced to temporarily shutter this doors, leaving some like Oasis and Warehouse and Debenhams to appoint administrators, while Laura Ashley fell into insolvency. Meanwhile, numerous chains — among them Ted Baker, Marks & Spencer, John Lewis and Harrods — made the decision to cut a portion of their workforce.