Amidst a tumultuous period for the retail industry, UK-based clothing retailer Superdry is actively seeking to trim its logistics expenses.
In its latest financial report, Superdry unveiled a disappointing performance, marked by a staggering 23.5% decline in group revenue compared to the first half of the previous year. The company attributed this downturn primarily to challenges within its supply chain and logistics operations, exacerbated by the lingering effects of the Covid-19 pandemic and geopolitical tensions.
The closure of stores due to pandemic restrictions led to a significant loss of trading days, and even over a year later, foot traffic has yet to return to pre-pandemic levels. Additionally, disruptions stemming from the Russian invasion of Ukraine in the latter half of FY22 continue to reverberate throughout FY24, causing input price inflation and dampening consumer confidence, thereby introducing further unpredictability into Superdry’s forecasts. The recent assaults on containerships in the Red Sea pose a potential threat to stock availability, amplifying the risks faced by the company.
Furthermore, Superdry acknowledges the impact of climate-related events on its sourcing operations and the countries of origin for its products. Extreme weather events disrupt the upstream logistics network, posing yet another challenge to the company’s stability.
In response to the rapidly evolving retail landscape, characterized by a shift towards digital shopping preferences and declining foot traffic in physical stores, Superdry is exploring avenues for growth in e-commerce. However, it acknowledges the risk of lagging behind competitors in this domain if it fails to adapt swiftly to changing consumer behaviors.
To mitigate these challenges and bolster its financial resilience, Superdry has initiated a comprehensive cost-saving initiative targeting £35 million in savings for the current fiscal year. This initiative encompasses various measures such as optimizing store operations, streamlining logistics and distribution processes, enhancing procurement strategies, and refining product ranges.
Efforts to optimize the logistics network center on improving distribution operations related to order fulfillment and managing customer returns. Superdry has renewed its partnership with Bleckmann for a five-year term, aiming to enhance omnichannel services from Belgium and invest in robotic technologies. Additionally, the company continues to collaborate with Maersk in the Asia Pacific region to further augment its logistical capabilities.