Superdry exits mainland China store venture

Superdry has announced it is taking back full control of the brand in mainland China following a review of its long-term business plan for its operations in the region.

The British fashion retailer said it had reached an “amicable agreement” with its current local partner Trendy International to exit their joint venture which was formed in 2016 and has 25 owned and 41 franchise stores.

The owned retail stores are set to close by the end of August, while the franchise partners in China will end their relationships by the end of the year, Superdry said in a statement.

The company anticipates that around 6 million pounds in total - of which 3 million pounds came from HY20 - will be written off in its FY20 accounts as a result.

Superdry to focus on online and wholesale

It comes as part of a wider transformation plan for the Superdry, spearheaded by its founder and CEO Julian Dunkerton, who returned to the helm of the struggling company last year.

“I believe that China represents a huge opportunity for Superdry in the longer term. As the way people are shopping there changes, it makes sense for us to shift our focus to the growth channels of online and wholesale,” said Dunkerton in a statement.

“Combined with the improvements we are making to our product ranges, I am confident that this is the right time for us to take back full control of our brand in China and to reposition our operations in the region to deliver profitable future growth for Superdry.”

Superdry’s fourth quarter performance was substantially impacted by the Covid-19 outbreak pandemic, with revenue down 36.9 percent to 118.5 million pounds and all company-owned stores and the majority of its franchise locations closed from late-March. Its FY20 group revenue was down 19.1 percent to 705.5 million pounds.

Dunkerton said at the time: “As with all retailers, the Covid-19 pandemic has caused major disruption to our business operations and supply chain. I am pleased with the accelerating shift in sales to online, and we’ve seen a particularly good performance from our women’s ranges, which, for the first time ever, are accounting for around half our sales. Clearly however, the closure of all our stores has had a major impact.”

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