Superdry slumped to a loss of £4.2m in the first half of its financial year as its founder seeks to “reset” the struggling fashion chain after retaking control.
It represents a 116% fall on the £26.4m pre-tax profit reported for the same six-month period last year.
Sales also dropped 11% to £368.1m in the six months to 26 October, its interim results show.
Despite this, chief executive Julian Dunkerton, who wrested back control of the business he founded after a bitter boardroom battle, has said he was pleased with the progress of changes being made to turnaround the firm’s fortunes, which he said will take around two to three years to introduce.
He pointed out the fall in sales was a result of having fewer promotions in an attempt to sell more items at full price, with higher profit margins.
The firm also reported an encouraging start to the peak Christmas trading period with its “strongest online Black Friday day ever”.
Mr Dunkerton said: “At this halfway point in our financial year, I am pleased with the progress we have made to comprehensively reset Superdry.
“We’re doing this through our product and brand, our physical and digital retail operations and a renewed focus on the retailing basics.
“We are only eight months into a process that will take two to three years, but I have great confidence in the strength of our new executive leadership team.”
Commenting on the company’s interim results, Robert Insall of BTG Advisory, said: “Since the return of founder Julian Dunkerton and a restructuring of the boardroom, Superdry has been injected with some fresh determination to rejuvenate its fortunes.
“Although these results won’t offer much immediate comfort to investors, the efforts of Julian Dunkerton and the board to maintain pricing and focus on margin seem to be paying some initial dividends.
“For Superdry, as for anyone in this sector, rebuilding and maintenance of a brand is always a challenge.
“It’s a tough time to turn around a retailer, falling high-street footfalls and rising rental costs affecting businesses across the country, while heavy discounting by fashion retailers to compete with the online market is crippling margins.
“However, with a focus on what initially made it popular and a clear long term strategy, Superdry has a reasonable chance of turning its business around.”
Mr Dunkerton also committed to remain at the company until at least April 2021 as he works through his turnaround plans.