News / Superdry to cut logistics costs amid 'unprecedented retail challenges'

© Bj�rn Wylezich

With the retail sector hit by “a period of unprecedented challenges”, UK clothing retailer Superdry is looking to cut its logistics costs. 

The firm reported a disappointing financial performance in its recent earnings statement, with group revenue down 23.5% on H1 last year. 

The cause, said Superdry, was largely attributed to supply chain and logistics struggles, as well as Covid and geopolitics.  

It said: “The global pandemic resulted in the enforced closure of stores, with many trading days lost… footfall has still not recovered to pre-pandemic levels, over 12 months later. 

“The Russian invasion of Ukraine occurred in the second half of FY22, and the lasting effects have been felt into FY24 on supply chains. The resultant input price inflation and impact on consumer confidence has increased uncertainty in our forecasts. 

“Stock availability represents a risk, particularly if the recent attacks on containerships in the Red Sea continue for a sustained period. 

“Physical and climate related matters relevant to our sourcing department and associated countries of origin, such as extreme weather events that impact our upstream logistics network, also represent a risk to the business.” 

Superdry added that the fast-changing retail climate has presented uncertainties, the consumer preference shift towards digital shopping has driven fewer visits to stores and declining profitability.  

“Store revenue was down 9.9% on the same period last year, to £106m… During H1 we closed 12 stores, and we will continue to assess further strategic store closures.” 

On the other hand, Superdry believes there is a “significant growth opportunity” presented by e-commerce. However, it added there was a danger that consumer habits were moving too fast for high-street retailers to adapt, and its own e-commerce platform could “trail in the wake of competition”. 

Superdry is implementing a cost efficiency programme to save £35m this year, to “more than offset inflationary pressure through FY24 and FY25”. Measures will include store optimisation, logistics and distribution savings, better procurement and range reduction. 

Savings across the logistics network are focused on distribution operations across order fulfilment and customer returns management. 

In 2021, The retailer renewed its contract with Bleckmann for five years, aiming to boost omnichannel services from Belgium and invest in robotics. Superdry also works with Maersk in Asia Pacific.