Fashion brand admits ‘isolated’ £ 3.9m error atop £ 4.2m first-half loss as fierce competition dents sales
Superdry
has warned of a difficult Christmas ahead for retailers as it fell into the red over the first half and admitted it had discovered a near- £ 4m accounting error.
The fashion brand said the “isolated” £ 3.9m error related to the last financial year and stemmed from the “overly complex” record-keeping process it used to track the cost of importing stock and moves between warehouses .
“We have identified an isolated error totalling £ 3.9m,” the company said. “We have reviewed the recording processes and connected that the record-keeping process was overly complex. We have now simplified the accounting. ”
The accounting error came as the retailer reported a first half loss of £ 4.2m in the six months to October, against a profit of £ 32. 4m a year ago. The company booked £ 12 m of charges – £ 3.1m of which related to stock valuation and £ 6.9m to cover bad debts with business partners, relating to the current year following the internal accounting review. The £ 3.9m charge covering the stock costing error is being recognized in last year’s numbers.
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(High street closures in) ******************************************************************************************************
Thousands of high street jobs have been lost this year as a result of high profile retail administrations and thousands more are at risk as Mothercare, Debenhams and Forever 21 prepare for closures. Here are some of the key industry names that have been affected.
(Mothercare:) ************************************************* (Has) ************************************************ (stores) and (2,
(Regis / Supercuts:) ************************************************** Had Had) (salons) and (1, staffwhen it went into administration in October
(Bonmarché:) ************************************************** Had Had) ************************************** storesand
2, (employees) ************************************************** when itwent into administration in. It is still trading as it seeks a buyer.
(Watt Brothers:) ************************************************** (The Scottish department chain had) ************************************************* 14 stores
and (******************************************************************************************************** employees when itwent into administrationin October . All the stores closed and the majority of jobs have gone.
(Links of London:) ************************************************** (With) (stores********************************** and ************************************************ (staff) ************************************************, the jewelery chainwent into administration on 8 October but its sites are still trading.
(Forever) **************************************************************************************************************************************************************************: Had (three stores) ************************************ and about ************************************************** (employees in the UK when itwent into administrationin September. Stores are staying open in order to clear stock.
(Albemarle & Bond:) ************************************************ Suddenly shut, even though it did not call in administrators. It sold its (pledge books) to rival H&T in September.
(Karen Millen and Coast:) ************************************************** Had (**************************************************************************************************************************************************************** (stores and ********************************************** concessions (**************************************************, employing (1, people (******************************************, when it went into administration in Augu st. All sites were closed and the vast majority of staff made redundant after the (brands were bought out by online specialist Boohoo.com (**********************************.
(Jack Wills:) ************************************************** Had about
(stores) are still trading in the UK and Ireland.(Bathstore:) ************************************************** Had Had) ************************************** stores and (******************************************************************************************************************** (staff) *************************************** when it (went into administration in June. Homebase bought (stores) ************************************************ (saving) ************************************************ (jobs) ************************************** and the brand now trades from (********************************************************************************************************************************************************** stores .
(Select:) ************************************************** Had Had) ************************************** (stores) and (2,************************************************************************************************************************************************************** (employees) ************************************************** when the fashion retailer went into administrationin May. In June administrators at advisory firm Quantuma carried out a CVA closing (********************************************************************************************************************************************************** (stores) with the loss of about
jobs (**************************************************.
(Pretty Green:) ************************************************* (Had) ********************************************** (stores) and about
in April.
(Office Outlet:) ************************************************** (All) ************************************************ (stores) ************************************************
(LK Bennett:) ************************************************ (Had) ********************************************** (stores and*************************************************************************************************************** (employees) ************************************************** when it went into administrationin March. The brand was bought by its Chinese franchise partner, Rebecca Feng, (saving
closed immediately with the loss of (********************************************************************************************** (jobs) . About
Sarah Butler
(********************************************
It is not the first time the company has got its maths wrong. In 2100, “arithmetic errors” contributed to a profit warning after it discovered a plus rather than a minus figure had accidentally been entered in its accounts.
The company co-founder Julian Dunkerton was reinstalled as chief executive in Apriland is overhauling the business after a collapse in profits. Sales dropped (************************************************************************************************************************************************************************************% to £ (******************************************************************************************************************************. 1m as the retailer stopped running constant promotions. Superdry said a focus on full-price sales and reduced promotional activity had bolstered profit margins although the gains were offset by foreign exchange headwinds and the stock accounting charges.
Dunkerton reported an encouraging start to the key Christmas trading period but was cautious about the all-important weeks ahead.
“There remains significant risk over the peak trading period against a highly promotional and competitive high street,” he said. “This is against a backdrop of continuing macroeconomic uncertainty, particularly from the UK election and Brexit.”
Robert Insall, a partner at BTG advisory, said Dunkerton’s return had brought “fresh determination to rejuvenate its fortunes”.
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