A L O T T O L O O K F O R W A R D T O
Annual Report and Accounts 2021
← Original & Vintage
(Front cover)
↓ Superdry Studios
Superdry Code
We are firmly on the journey to
turn the brand around, and our
clear and ambitious strategy will
help deliver this. What inspires
people has changed, and where
they find inspiration has shifted
too, leading to the need to be
product and design-led in all
that we do.
We are making it easier for
customers to navigate our product
range according to their style
preferences through our five
collections:
Original & Vintage
Superdry Studios
Superdry Code
Superdry X
Performance Sport
4
6
8
10
12
Contents
Strategic Report
Governance
3
Financial Highlights
3
Chair’s Statement
14
At a Glance
16
Business Model
20
Covid-19 Statement
23
Chief Executive Officer’s Review
26
Strategic Framework
28
Key Performance Indicators
30
Inspire Through Product & Style
34
Engage Through Social
36
Lead Through Sustainability
40
Sustainability Report
44
Make It Happen
48
Our People
56
How We Manage Our Risks
Non-Financial Information Statement 67
68
Section 172 Statement
75
Chief Financial Officer’s Review
Visit us online at:
corporate.superdry.com
Board of Directors
Chair’s Governance Review
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Directors’ Remuneration Report
Directors’ Report
Our Financials
Independent Auditor’s Report
Group Statement of Consolidated
Income
Balance Sheets
Cash Flow Statements
Statements of Changes in Equity
Notes to the Group and Company
Financial Statements
Five Year History
Notice of Annual General Meeting
Shareholder Information
84
86
87
93
97
104
124
129
143
144
145
146
148
201
202
212
2
Superdry plc Annual Report 2021 Financial Highlights
Group Revenue (£m)
£556.1m
Adjusted (loss)/profit before tax* (£m)
YoY Movement (21.1)%
£(12.6)m
YoY Movement (69.9)%
2021
2020
2019
556.1
2021
704.4
2020
871.7
2019
(12.6)
(41.8)
38.0
Statutory (loss)/profit before tax (£m)
Adjusted basic EPS* (p)
£(36.7)m YoY Movement (78.0)%
(19.4)p
YoY Movement (55.4)%
2021
2020
2019
(36.7)
2021
(166.9)
2020
(89.3)
2019
Basic EPS
(44.0)p
YoY Movement (74.8)%
Closing Net Cash*
£38.9m
2021
2020
2019
(44.0)
2021
(174.9)
2020
(124.2)
2019
(19.4)
(43.5)
32.4
YoY Movement 6.0%
38.9
36.7
35.9
*
‘Adjusted’ and ‘Net Cash’ are used as alternative performance measures (APMs). A definition of APMs and explanation as to how they are calculated
is included in note 36 to the Group and Company Financial Statements.
Chair’s Statement
Welcome to Superdry plc’s Annual Report
for FY21. I was appointed Chair on 29 April
2021 and I am excited to work with another
global brand. During my first few months in
post, I have spent time with fellow Board
members and senior colleagues at
Superdry (as far as restrictions have
allowed), familiarising myself with
Superdry’s business model and operations.
I would like to take this opportunity to thank former Chair,
Peter Williams, for his work with the Board and Superdry
from April 2019 to April 2021. I would also like to thank all
of my new colleagues at Superdry, at our Head Office and
in our stores and locations worldwide, for their continued
hard work and commitment during this difficult and
extraordinary year.
The ways in which the Covid-19 pandemic have impacted
our customers, colleagues, suppliers and operations
during FY21, and how we have responded to those
challenges, have been set out on page 20. The crisis
encouraged the Executive Team to sharpen the strategy,
accelerating reviews of digital platforms and of operations
across all channels, enabling Superdry to emerge from the
pandemic in a good position to drive the strategy forward.
I invite you to read about our new strategy, led by Superdry’s
founder and CEO, Julian Dunkerton, and the Executive
Team, in the Strategic Report on page 26. On page 36, you
can find out more about our sustainability ambitions and on
page 68, about the ways in which Superdry’s stakeholders
have been considered as part of the Board’s decision making
and strategy. There have been changes at Executive
Committee and Board level during FY21, which you can read
about in the Corporate Governance Report, which starts on
page 87. Our financial results are presented from page 129.
As the Executive Team starts to implement our new strategy,
there is a lot of work to be done, but there is also a lot to look
forward to.
Peter Sjölander
Chair, Superdry plc
3
Superdry plc Annual Report 2021 Strategic Report → Collection Showcase – Original & Vintage
ORIGINAL & VINTAGE
“Original & Vintage is about taking
from the Truth, Source and Craft of
the past, youth and sub-culture. This
isn’t about recreating the past, it’s
about reinterpreting it in a unique way
through a new lens, whilst retaining its
DNA. Creating new Icons and Style
stories against consumer opportunities
is what we are passionate about.
Creating aspiration around style, that
then becomes the consumer’s own style
story or adventure.”
Dan Hanvey
Head of Collections
4
Superdry plc Annual Report 2021 THE SOUL OF THE BRAND
Our story is built on the love of provenance
and respect for the maker. Original & Vintage
goes back to our roots: the thrift stores of
London, the heritage style of America, our
ever-obsessive attention to detail and
craftsmanship. Laid-back, unique, iconic,
this is the soul of our brand.
Consumer Target: Teen to Cultured
Adventurer
Teen
Adventurer
Gap Year
Adventurer
Graduate
Adventurer
Cultured
Adventurer
13→15
16→24
13→15
16→24
25→34
35+
13→15
16→24
25→34
35+
d
n
e
r
T
r
e
t
t
e
S
i
n
o
h
s
a
F
r
e
w
o
l
l
o
F
t
n
e
d
i
f
n
o
C
m
a
e
r
t
s
n
a
M
i
5
Superdry plc Annual Report 2021
Strategic Report → Collection Showcase – Superdry Studios
SUPERDRY STUDIOS
“Superdry Studios
is a premium collection
of understated style
with a rock & roll edge,
appealing to the graduate
and cultured fashion follower.
Studios offers conscious choices
without compromising on style.
Studios blends Japanese
attention to detail, British
idiosyncratic charm and
American relaxed style.”
Emma Rowley
Design Manager
6
Superdry plc Annual Report 2021 CLASSIC STYLE WITH A ROCK AND
ROLL SPIRIT
The Studios look is effortless and aspirational,
defined by classic silhouettes, perfected cuts
and elevated fabrics. A streamlined wardrobe
for the conscious consumer, Studios
transcends trends and respects the planet
with premium essentials in elevated fabrics.
Sophisticated style with a sustainable ethos.
Consumer Target: Graduate and Cultured
Adventurer
Teen
Adventurer
Gap Year
Adventurer
Graduate
Adventurer
Cultured
Adventurer
d
n
e
r
T
r
e
t
t
e
S
n
o
i
h
s
a
F
r
e
w
o
l
l
o
F
t
n
e
d
i
f
n
o
C
m
a
e
r
t
s
n
i
a
M
25→34
35+
25→34
35+
7
Superdry plc Annual Report 2021
Strategic Report → Collection Showcase – Superdry Code
SUPERDRY CODE
“Superdry Code is
a collection that
stands for style led,
trend driven sports
lifestyle apparel.
Designed by the
youth, for the
youth.”
Charlotte Waters-Robinson
Design Manager
8
Superdry plc Annual Report 2021 ICONIC STYLES WITH BOLD
SIGNATURE DESIGNS
Code delivers modern style with bold graphic
language, original design, and a premium fit
and finish. Classic sports logos with a
contemporary spin, authentic colour runs,
heavyweight quality, and obsessive attention
to detail are the signatures of the brand.
Consumer Target: Teen and Gap Year
Adventurer
Teen
Adventurer
Gap Year
Adventurer
Graduate
Adventurer
Cultured
Adventurer
13→15
16→24
13→15
16→24
25→34
13→15
16→24
d
n
e
r
T
r
e
t
t
e
S
n
o
i
h
s
a
F
r
e
w
o
l
l
o
F
t
n
e
d
i
f
n
o
C
m
a
e
r
t
s
n
i
a
M
9
Superdry plc Annual Report 2021
Strategic Report → Collection Showcase – Superdry X
SUPERDRY X
“A cultural style clash
designed to engage &
champion individuality.
Driving hype on and offline.
Committed. Connected.
Subversive.”
Rachel Heuston
Designer
10
Superdry plc Annual Report 2021 GENDER-NEUTRAL STREET-
STYLE APPAREL
Superdry X is energy, creativity, an incubator
for a new visual identity, inspired by
community, culture and collaboration.
Statement design, displaced fabrics, bold
graphics, unexpected prints, assured styles.
Always evolving. Always experimenting.
Always surprising.
Consumer Target: Teen and Gap Year
Adventurer
Teen
Adventurer
Gap Year
Adventurer
Graduate
Adventurer
Cultured
Adventurer
13→15
16→24
13→15
16→24
d
n
e
r
T
r
e
t
t
e
S
i
n
o
h
s
a
F
r
e
w
o
l
l
o
F
t
n
e
d
i
f
n
o
C
m
a
e
r
t
s
n
a
M
i
11
Superdry plc Annual Report 2021
Strategic Report → Collection Showcase – Performance Sport
PERFORMANCE
SPORT
“Designed to encourage,
inspire and motivate.
Superdry Performance Sport
delivers technical apparel to
answer our consumers’
needs, solve their problems
and exceed their
expectations.”
Catie Marshall
Design Manager
12
Superdry plc Annual Report 2021 STRONG STYLE, STRONG
PERFORMANCE
Engineered to optimise every workout,
Performance Sport fuses technical standards
with stand-out style. Innovation is at the core
of the collection with high-tech fabrics that are
lightweight, moisture-wicking, breathable and
seamless. Always delivering high
performance, style and comfort.
Consumer Target: Gap Year and Graduate
Adventurer
Disciplines: Run, Train, Snow, Flex
Teen
Adventurer
Gap Year
Adventurer
Graduate
Adventurer
Cultured
Adventurer
16→24
16→24
25→34
35+
d
n
e
r
T
r
e
t
t
e
S
n
o
i
h
s
a
F
r
e
w
o
l
l
o
F
t
n
e
d
i
f
n
o
C
m
a
e
r
t
s
n
a
M
i
13
Superdry plc Annual Report 2021
Strategic Report → At a Glance
A
T R U L Y
D i s t i n c t i v e
B u s i n e s s
Our brand story so far
Our product and design-led approach to creating quality
products has been central to how we have operated over the
past 17 years, and led to our success as a leading global
fashion brand. Our brand story to date has been built on:
• Best in class product – A combination of market-leading
quality delivered at astonishing value for money;
• Financially disciplined approach with a relentless focus
on cash preservation;
• Unique brand identity creating amazing clothes, through
an obsession with design, quality and fit;
• Strong multi-channel capabilities – We have a scalable
business with 231 owned stores and 475 franchises and
licences, operating in 53 countries as well as 21 branded
websites, translated into 13 languages; and
• A distinctive culture with passionate and creative
leadership that will drive the business forward.
Where we operate
UK & ROI
103 owned stores
13 franchised & licensed stores
Rest of World
169 franchised & licensed stores
USA
28 owned stores
Focus markets
Other markets
Europe
100 owned stores
293 franchised &
licensed stores
14
Superdry plc Annual Report 2021 Strategic Report → At a Glance
Our forward-facing, mission-led strategy
Our mission-led business has four key objectives, delivered through clear strategic initiatives. Our objectives and strategic
plans are explained throughout the Strategic Report on pages 2 to 83.
Explore the full Superdry
‘Brand House’ on page 26
“TO INSPIRE AND ENGAGE STYLE-OBSESSED CONSUMERS,
WHILE LEAVING A POSITIVE ENVIRONMENTAL LEGACY”
Inspire
through
PRODUCT
& STYLE
Engage
through
Lead
through
SOCIAL
SUSTAINABILITY
MAKE IT HAPPEN
We’re adapting to a new marketplace
We’re responding to market changes and resetting our brand, whilst connecting
with new consumers
• Increased trading environment uncertainty
• Accelerated digital transformation and digital
conversion
• Increased environmental and social awareness
• Shift towards ‘local’ consumerism
• Market opportunities as competitors exit
• Power-shift from landlords to retailers
• New working patterns and environments
→ We’re responding to change
→
→
and resetting our brand
→ whilst connecting with new consumers
15
Superdry plc Annual Report 2021 Strategic Report → Business Model
O u r
O p e r a t i o n a l
b u s i n e s s M o d e l
Superdry has an agile, lean, and responsive operational base. We distribute product to our
global customer base seamlessly across multiple channels. We want our customers to be able
to order from anywhere, from any device, using any payment method and have it delivered to
any location from our distribution centres.
Describing the product journey from initial creation through to end consumer purchase, our product
lifecycle can be viewed across four critical activities
1 → DESIGN
We have a passionate team of
designers, each of whom is now
aligned to one of the collections within
our consumer segmentation.
2 → MAKE
Once our designers have imagined
next season’s collection, it is over
to our Sourcing team to work
closely with our global network of
suppliers to bring the product to life.
Our seasonal
product lifecycle
4 → SELL
Our global footprint has been achieved
through a truly multi-channel approach,
leveraging our eight routes to market to
maximise the addressable market.
3 → SHIP
We have a truly global distribution
network, serving our multi-channel
operations worldwide. This is delivered
through four main distribution centres.
16
Superdry plc Annual Report 2021 Strategic Report → Business Model
1 → DESIGN
We have a passionate team of designers,
each of whom is now aligned to one of the
collections within our consumer segmentation
(see page 30 for further details).
This organisational structure enables them to design for a
target demographic to ensure they create product that is
consistently the best expression of our brand. We have over
40 designers across the five collections, as well as a
dedicated Centre of Excellence to drive true product
innovation. The design process for our mainline collections
starts 18 months prior to hitting our owned store shelves
and online. Short-order product gives us the opportunity to
capitalise on trends with limited edition, low volume runs
or augment the mainline collection at a later point in
the process.
Centre of Excellence (CoE) case study
Recognising the importance of innovation to the brand, we
created the ‘Centre of Excellence’ in late 2020. This is our
innovation hub, responsible for continuous research, design,
and development outside of the standard product
development cycle, acting as inspiration for later seasons.
This team focuses on ensuring that authenticity,
crafstmanship and sustainability are kept front of mind,
creating innovative product that makes everyday lives better
with little or no impact to the environment.
An example of a CoE innovation initiative for our Autumn/
Winter (AW21) range is our ‘Vintage Re-purposed by
Superdry’ collection. This takes very low volume, end-of-life
stock and reinvents it using sustainable dying and
embroidery processes in the UK. This gives us an
opportunity to create low impact, unique product that
capitalises on our vintage heritage.
17
↑ Original & Vintage
Vegan trainers
Superdry plc Annual Report 2021 Strategic Report → Business Model
2 → MAKE
Once our designers have imagined next
season’s collection, it is over to our Sourcing
team to work closely with our global network of
suppliers to bring the product to life.
Superdry’s products are predominantly manufactured
overseas by our long-standing, trusted and resilient supply
base – and these strong relationships were crucial to
helping Superdry manage stock intake through 2020 as
Covid-19 disrupted consumer demand and supply chains
across the world. The split of manufacturing in FY21 (i.e., the
Spring/Summer 2020 (SS20) and Autumn/Winter 2020
(AW20)) was 25% in India, 19% in Turkey and 46% in China
with the remainder largely coming from Sri Lanka, Vietnam
and Cambodia.
Please see the ‘Sustainability’ section on page 36
for more information on this pillar of our strategy
Short-order case study
A key element of our strengthened strategy is the
implementation of short-order, limited volume runs of specific
product opportunities within a collection, to enhance and
augment the mainline collection online and in our flagship
stores. This product is primarily sourced from Turkey with a
reduced lead time of <12 weeks, allowing us to adjust a current
season collection, capitalising on ‘in-season’ trends such as
tie-dye and recycled clothing that were not envisioned when
the mainline collection was originally created, driving
innovation and scarcity.
Despite the rapid design and manufacturing timelines, our
short-order product is created with the same rigorous quality
and ethical standards as our longer-lead time product,
preserving the value of our product.
Turkey
86
Rest of World
5
China
120
India
69
Cambodia
7
16
Sri Lanka
22
Vietnam
Factories
Distribution centres
The Eagle
Geodis
Kutztown, PA, USA
The Duke
Clipper Logistics
Burton-On-Trent, UK
The Baron
Bleckmann
Grobbendonk, Belgium
Ghent
Bleckmann
Desteldonk, Belgium
3 → SHIP
We have a truly global distribution
network, serving our multi-channel
operations worldwide. This is delivered
through four main distribution centres:
• ‘The Duke’ in the UK (500k sq. ft.) and ‘The Baron’ in
Belgium (720k sq. ft.), both of which are ‘bonded’ allowing
us to minimise the impact on the business as a result of
Brexit. These warehouses primarily deal with inbound
stock for Stores and Ecommerce customers, as well as a
small element of Wholesale.
• An additional warehouse in Ghent, Belgium (335k sq. ft.)
deals only with Wholesale orders.
• ‘The Eagle’ in the USA (140k sq. ft.), a multi-channel
fulfilment centre – handling inbound stock for Stores,
Ecommerce and Wholesale orders.
Logistics case study
We are proud of the progress our team has made in
improving efficiencies in our warehouses using robotics.
Multiple industry awards have been received for our
excellence in technology transformation, recognising the
impact of our High-Performance Racking Solution for our
multi-channel fulfilment and returns. Instead of operators
manually pushing carts around to pick items, the robot now
pulls the rack to the operator, significantly reducing walking
time, which has more than tripled the rate for both put-away
and packing.
We now operate 65 robots across our two biggest sites in the
UK and Belgium and we are expanding our use of automation
to help drive continuing improvements in operational
efficiency across our network.
Visit us online at:
corporate.superdry.com
18
Superdry plc Annual Report 2021 Strategic Report → Business Model
4 → SELL
Our global footprint has been achieved
through a truly multi-channel approach,
leveraging our eight routes to market to
maximise the addressable market.
We remain committed to the high street and view stores
as an integral element of the customer journey.
Consumers’ shopping habits continue to change – and this
change has been accelerated with Covid-19, with online
channels increasingly used to research, compare and
purchase products. Recognising this macroeconomic trend,
we are investing in our digital marketing and social media
capabilities, as well as refreshing the user experience and
branding across our owned websites this Autumn, to support
the brand reset.
Our Fulfil From Store and Click & Collect technology
creates a seamless customer experience between digital
and physical, as well as allowing us to optimise working
capital management.
We have an agile, lean and responsive operational base.
We distribute our products to customers seamlessly across
multiple channels. We want our customers to be able to
order from anywhere, from any device, with any payment
method and have it delivered to any location from our
distribution centres in the UK, Belgium and the US.
Our approach to each market is considered and seeks to
optimise returns and minimise risk by tailoring the channel
and marketing strategy to each country and its particular
stage of development.
In delivering this strategy, we benefit from deep experience
and established capability in the following eight routes to
the customer.
Our routes to the customer
Owned channels
Third party
Owned stores
Mono-branded stores, operated by the
Group, in prime locations split between
High Streets and shopping centres
Franchise & licence business
Freestanding Superdry stores
operated by partners
Concessions
Smaller stores, largely located in
airports, operated by the Group
in retail space owned by partners
Key & independent partners
Freestanding multi-brand stores
owned and run by retail partners,
selling Superdry merchandise
D
E
N
W
O
Our routes
to market
W
H
O
L
E
S
A
L
E
E
C
ECOM M E R
Outlets
Sale of previous seasons’
product in specialist stores
Online distribution via partners
Distribution of Superdry merchandise
using our Key & Independent retail
partners’ own online platforms
Online store superdry.com
Digital flagship website, with localised
sites in key markets
Online distribution via
offprice Ecommerce
Sale of previous seasons’
product on outlet websites
19
Superdry plc Annual Report 2021 Strategic Report → Covid-19 Statement
T a k i n g
d e c i s i v e
a c t i o n s
Our response to Covid-19
Throughout the pandemic there has been
a significant level of uncertainty with
restrictions regularly changing depending
on local Government advice. Taking decisive
actions to protect the long-term financial
position of Superdry, whilst ensuring the
ongoing well-being, health, and safety of our
colleagues and customers, has continued
to be our top priority.
We have continued to trade online throughout the lockdown
periods, sustaining operations in our distribution centres,
whilst ensuring all appropriate measures were taken to
ensure the health and safety of our staff.
During FY21, an average of 39%1 of store trading days were
lost. However, by the end of June 2021, most of our owned
stores had reopened.
20
Superdry plc Annual Report 2021 Strategic Report → Covid-19 Statement
Government support
As a consequence of the enforced store closures in FY21 and
in order to preserve as many jobs as possible through the
peak of the pandemic we furloughed staff across our
international owned store estate, corporate offices and
distribution centres. The support we received from
applicable furlough (or similar) schemes across the UK and
EU to date totals £12.1m, with £9.2m recognised in FY21.
During the initial wave of the pandemic our Executive team
took a temporary pay cut of 20% for three months from 1
April 2020, whilst our CEO and members of the Board took a
cut of 25% for six months.
We also benefitted from UK Business Rates relief, equivalent
to £15.7m in FY21 (FY20: £1.7m). Currently, this scheme has
only been extended for a small number of our qualifying
stores and the expected benefit in FY22 is roughly £5m. In
addition, the business was eligible for £2.5m of local
government grants across a number of markets (FY20: £nil).
As at FY21 year end the Group had a modest deferral of
€1.5m for Belgian VAT, with no other material deferrals of
VAT, PAYE, or duty across any other territories.
Cash management
Improving operational efficiency and overall liquidity has
continued to be a focus during the pandemic through
reduced capex, tight control over day-to-day spend and
working collaboratively with suppliers.
In FY21, 39 stores’ leases were renegotiated representing
17% of our portfolio. The total annualised cash benefit of the
leases negotiated in FY21 was £5.3m2, with an average lease
length of three years. In addition to the underlying
reductions, there were £7.7m of one-off Covid related
savings recognised in FY21 and we are anticipating in excess
of £10m in FY22. Due to the continuing disruption from
enforced closures, there was ~£40m of deferred rent and
service charges, inclusive of VAT, as at the FY21 year-end,
though we are yet to conclude on the majority of these
contracts and so anticipate being able to reduce this liability
during FY22.
Inventory decreased by £10.4m to £148.3m through reduced
buys and targeted clearance activity, and we will continue to
see opportunities to reduce our working capital further in
FY22 through optimised stock management.
Given the continued unprecedented levels of uncertainty,
the Group’s financial performance and the focus on cash
preservation, the Board agreed to recommend to
shareholders that no final dividend be paid in FY21.
The Group agreed a new Asset Backed Lending (ABL)
facility in August 2020 for up to £70m, in addition to a
£10m overdraft. As a consequence of the cash preservation
measures and government support detailed above, we
maintained a net positive cash balance in excess of £20m
throughout FY21. Further detail regarding liquidity and our
borrowing facilities can be found in the CFO Review on
page 75.
One-off rent savings recognised in FY21
Net positive cash balance in excess of
£7.7m
£10m+ in FY22
£20m
throughout FY21
Employee and customer safety
The Superdry Board and Executive Team have continued to
ensure robust processes are in place to allow for swift
decision making in a rapidly changing environment. The
Covid-19 Incident Management Team, comprising a subset
of the Executive Team, has continued to meet throughout
the pandemic to manage the response to the crisis.
When our stores reopened, we ensured availability of all
necessary cleaning equipment, hygiene products and
Personal Protective Equipment (PPE) to keep our employees
and customers safe, in line with local government guidelines.
We were an early adopter in introducing lateral flow testing.
As we started to return to Head Office in greater numbers,
we offered free home testing kits to all our employees and
have implemented rigorous social distancing and hygiene
measures. Recognising the benefits of flexible working, we
made investments in new technology for our meeting rooms
and personal equipment to allow a hybrid approach
to working.
Further details on:
Our approach to Covid-19 risk can be found in:
‘How We Manage Our Risks’ on page 56
Our expected outlook can be found in the:
‘CFO Review’ on page 75
Colleagues (Employees):
‘Our People’ report on page 48
1.
‘Lost trading days’ calculated as the simple average number of stores
closed each day of the period as a percentage of total potential trading
days in the period, excludes impact of restricted trading hours.
2. Cash annualised saving has been calculated based on the effective
date of the lease agreement.
21
Superdry plc Annual Report 2021 Strategic Report → CEO Review
22
Superdry plc Annual Report 2021 Strategic Report → CEO Review
A B R A N D
b u i l t o n
s t y l e
JULIAN DUNKERTON
CHIEF EXECUTIVE OFFICER
This year has been another one full of Covid-related
disruption, but I am incredibly proud of the resilience our
team has continued to show, driving the operational and
strategic progress needed to position Superdry for success
when we emerge from the pandemic.
Like other brands with a physical presence, Covid-19 has had
profound and far-reaching impacts on our performance. We
lost 39%1 of our store trading days to enforced closures
during FY21 (FY20: 10%), with footfall materially suppressed
due to social distancing restrictions, even during periods
where we could trade. Though our improving Ecommerce
performance mitigated the worst of this impact, Group
revenue for the year was down 21%. Despite the fall in
revenue, we have improved our full year adjusted loss before
tax by 70% and our statutory loss before tax by 78%, with the
year-on-year benefit from reduced depreciation, the one-off
benefit from lease modifications as well as cost saving
measures and government support helping to offset trading
shortfalls. Further details on the financial performance in
FY21 can be found in the CFO Review on page 75.
“Our mission is to inspire and engage
style-obsessed consumers, while leaving
a positive environmental legacy.”
Our gross margin stepped back by 90bps as our need to
react to the pandemic and generate and preserve cash
meant we had a higher level of promotional activity than we
had planned. This was amplified by the dilutive effect of an
increased mix of Ecommerce sales during periods of store
closures and beyond. We are fully committed to returning to
a full-price proposition as the economy recovers, which will
drive a recovery in the gross margin, whilst also
strengthening brand perception and protecting the integrity
of our foundation product.
We took the opportunity to sharpen our strategy this year,
despite the challenges posed by the pandemic. Our mission
is to inspire and engage style-obsessed consumers, while
leaving a positive environmental legacy. This clarity has
allowed the entire business, led by our strengthened
Executive Team and Board, to prioritise our efforts to
achieve our four strategic objectives. These are:
→ Inspire through
PRODUCT & STYLE
→ Engage through
SOCIAL
→ Lead through
SUSTAINABILITY
→ All underpinned by the operational
foundations to
‘MAKE IT HAPPEN’
23
Superdry plc Annual Report 2021 Strategic Report → CEO Review
Inspire through Product & Style
Last year we introduced consumer segmentation by style
preference, life stage, mindset, and gender. As we continue
to iterate our design and marketing approaches against this
framework, it has become clear that we have a huge
opportunity with 13–15-year-old consumers, and so have
extended our segmentation to capture this market.
We launched our Autumn/Winter20 (AW20) and Spring/
Summer21 (SS21) ranges this year with full alignment to our
new design philosophy, and so far, the product is resonating
well with customers. Against the backdrop of the pandemic,
we were unable to deliver a truly branded customer
experience through our stores, and we look forward to
Autumn/Winter21 (AW21) being the first opportunity to
showcase this across all our channels. Following some
promising early pilot results, where we saw comparatively
stronger trading in re-merchandised locations, we will
continue to roll out this approach in our stores to bring this
product segmentation to life.
This segmentation of our product offers new Wholesale
opportunities by targeting customers with specific
and relevant collections and we plan to develop new
relationships, and strengthen existing ones, over the coming
year. We were encouraged with the 29% increase for
in-season orders for SS21 and AW20, giving us confidence
that the new product is resonating with our partners and
↑ Original & Vintage
24
their consumers, even against the backdrop of this
challenging trading environment.
The next step in our product journey is the implementation
of short-order (limited volume runs of product) which will be
available online and in our flagship stores. This will allow us
to react much more quickly to consumer demands and
trends, with a reduced lead time of down to 12 weeks in
some cases.
Engage through Social
Engaging our consumers through social media remains the
core focus of our marketing activity. In FY21 we substantially
increased the number of influencers we used, working with
more than 250, allowing us to target our campaigns and
activity to the relevant consumer segments, focusing
particularly on younger consumers.
Signing Neymar Jr. to front our organic cotton underwear
and sleepwear campaign, showcasing both the brand and
sustainable product to his 156m followers, was one of our
key marketing highlights this year and this collaboration is a
statement of our intent for the future. We have already seen
a positive impact from this, with engagement rates for the
first SS21 campaign achieving record levels, and driving new
followers to our own social accounts.
We recognise the importance of digital marketing to
generate brand awareness and acknowledge that historically
we have underspent in comparison to our peer group. We are
accelerating our journey to achieve best-in-class social
media engagement and used this year to make important
first steps. It has been encouraging to see our total followers
increase by 6% year-on-year to 3.3m.
As well as driving awareness and consideration among our
target consumers, this digital transformation impacts the
entire customer journey, and this prioritisation of our direct
to consumer Ecommerce channel will be the driver behind
our revenue and profitability recovery.
Lead through Sustainability
Sustainability is embedded in the culture of Superdry.
We recognise the increasing importance of reducing our
environmental impact to all our stakeholders including
customers, suppliers, and government organisations. Our
ambition is to become the most sustainable listed global
fashion brand by 2030, and we have been prioritising
sustainability in every part of the business as we pursue
that goal.
This year we won the Drapers Sustainable Fashion Awards
2021 ‘Positive Change Award’, in recognition of initiatives
such as new packaging that has a 60% lower carbon
footprint, and targets for net zero carbon emissions across
our own sites and logistics by 2030. We were also ranked 1st
in the Financial Times as “Europe’s Climate Leaders 2021”
for having delivered a 97% reduction in our direct
greenhouse gas emissions between 2014 and 2019; an
incredible achievement given the competition.
We have improved our Carbon Disclosure Project rating
from C to B and have a clear path on how we are going to
get to A. We continue to move away from single-use plastic
packaging and in FY21, 93% of our packaging
was recyclable.
Superdry plc Annual Report 2021 Strategic Report → CEO Review
Our broader sustainability initiatives include accelerated
organic cotton targets where all our pure cotton garments will
be produced entirely from organic cotton by 2025, working
closely with 20,000 growers in India to convert their farms to
organic farming, adding the equivalent volume of organic
cotton to the market that we need as a brand. In recognition
of these commitments, I was thrilled to be awarded the Best
Organic Cotton Ambassador by The Soil Association in July,
the UK’s only organic awards.
In FY21 33% of all our garments contained organic, recycled,
and low impact fibres including Tencel, hemp, yak or linen,
and generated around 35% of our AW20 and SS21 revenue.
Make it Happen
The foundation of our business starts with our people. This
year the Executive Team has been strengthened with several
key hires, including Silvana Bonello (COO), Shaun Wills (CFO)
and Justin Lodge (CMO). We also have a new Chair, Peter
Sjölander, who has a hugely relevant and successful history
with Helly Hanson, as well as experience overseeing growth
and technology implementations.
We recognise the need to continuously update our core
systems and processes to maximise efficiency, improve
customer experience and ensure the business is set for
future growth. The significant investment in our technology
infrastructure will be carried out over a number of years,
starting with the migration of our legacy Ecommerce platform
over to microservices technology. This will provide us with
much needed agility, better functionality to improve our
promotional mechanics and to future-proof us against wider
technology developments. We have chosen to build the
platform internally, allowing us to control the roadmap and
tailor the platform to our needs. We expect this to be ready to
launch in early 2022.
We have made great technological progress in our logistics
operation, and the team has received awards for the use of
advanced robotics which have tripled our efficiency rates for
processing Ecommerce returns. These include a CILT Award
for Excellence 2020 for our Warehouse Operations, The
Technology Transformation Award from The Logistics
Awards and a Supply Chain Excellence Award 2020. We will
continue to innovate in this area, rolling out automation
across our global network of fulfilment centres.
Despite the enforced stores closures, we have reduced our
total inventory by 2.3m units (14%), due to a disciplined
inventory buy and optimised use of clearance channels. This
more efficient stock management strategy will allow us to
reduce our inventory further in FY22, even with the
expectation of continued headwinds as the world recovers
from the impacts of the pandemic.
rent savings and are anticipating in excess of £10m in FY22.
These non-recurring credits are in addition to the underlying
annualised cash lease renewal savings of £5.3m agreed in
FY21 from the 39 stores renegotiated in the period. We will
continue to negotiate reductions and are not afraid to walk
away if we are unable to get the right deal, and we exited 15
stores during FY21 where the landlord was unwilling to
regear the lease to acceptable terms.
We remain committed to the high street. Post year-end we
announced our exit from Regent Street and our move to
open our new global flagship store on London’s Oxford
Street. The new store will bring the brand reset to life,
showcasing the five collections over 22,000 sq ft of sales
space across two floors. The store will have sustainability
embedded through our product, the customer experience
and the building itself. The lower ground floor will house
Wholesale showrooms and versatile space to be used as
a base for the brand ambassador, influencer, and
affiliate programmes.
During the pandemic, we have continued to make use of
available furlough, or similar, support across all territories, to
retain as many of our colleagues as possible. The support we
have received is outlined on page 20 as part of our Covid-19
review. For as long as there is uncertainty and volatility due
to the pandemic, continued support will be needed from the
government to all retailers in the sector, and we continue to
strongly encourage a fundamental review of the current
business rates system in the UK.
“While the economic backdrop
remains uncertain, there is a lot to
look forward to.”
Looking forward
We continue to make progress in turning around and
evolving the brand, despite the significant challenges we
have faced as a result of the Covid-19 pandemic. I am
impressed by the dedication of our team throughout this
period and would like to thank everyone for their unwavering
hard work and enthusiasm.
Our newly articulated strategy means our people are fully
aligned with our objectives, focusing on product, social and
sustainability, underpinned by our ongoing digital
transformation. While the economic backdrop remains
uncertain, it is clear to me that there is a lot to look forward to.
The inventory reduction was a key driver in our net cash
balance ending the year up £2.2m at £38.9m and I am
particularly pleased that we did not have to use our Asset
Backed Lending (ABL) facility, maintaining a net cash balance
in excess of £20m throughout the period.
Julian Dunkerton
Chief Executive Officer
15 September 2021
Rent negotiations have been another priority for the business
this year as part of our plan to return stores to profitability.
During H2 we have continued to negotiate rent relief from
landlords relating to the extended periods of enforced
closures. As at the year end, we recognised £7.7m of one-off
1.
‘Lost trading days’ calculated as the simple average number of stores
closed each day of the period as a percentage of total potential trading
days in the period, excludes impact of restricted trading hours.
2. Cash annualised saving has been calculated based on the effective
date of the lease agreement.
25
Superdry plc Annual Report 2021 Strategic Report → Strategic Framework
Our mission-led strategy
1
2
3
2
3
“TO INSPIRE AND ENGAGE STYLE-OBSESSED CONSUMERS,
WHILE LEAVING A POSITIVE ENVIRONMENTAL LEGACY”
Inspire
through
PRODUCT
& STYLE
Create a style-obsessed
consumer base
Provide outstanding
product choice & value
Deliver inspiring
brand experiences
Engage
through
Lead
through
SOCIAL
SUSTAINABILITY
Achieve best-in-class
social media engagement
Provide a leading
Ecommerce experience
MAKE IT HAPPEN
Low impact
materials
Net zero carbon
emissions
Lead positive
change
Inspire our workforce through
the spirit of adventure
A fully integrated
‘Go to market’ strategy
Establish core systems
and data insight
1 Mission
2 Objectives
3 Initiatives
Our product and design-led approach to
creating quality products has been central
to how we have operated as a brand over
the past 17 years, and led to our success
in becoming a leading global fashion brand.
Our ability to design quality products continues; however,
future growth will come from understanding and connecting
with our customers through style, knowing both their style
choices and lifestyle aspirations. What we design, how we
curate it, and the customer experience we create will be
aligned with their aspirations.
Our five collections will increasingly appeal to their
respective target consumers by embracing the cultures
which they form part of and understanding what inspires
them. We will deliver inspiring brand experiences by
integrating customer experiences with value propositions on
our consumers’ terms.
We are proud of the entrepreneurial spirit that started
Superdry and it continues to thrive today in our company
culture. We are upfront and open about the things we care
about most; from our customers to our team and the wider
world we live in. We like to make things happen: challenging
the status quo and pushing boundaries which is part of our
DNA – we are never complacent and always want to
progress with our mission. We are committed to doing the
right thing and want to leave a positive environmental legacy.
Our changing market and what this means
for Superdry
The marketplace in which we operate has fundamentally
changed. Digital platforms now dominate how we
communicate with our customers and how they shop.
They allow us to create instant direct connections with
style-obsessed consumers across the globe. This gives us
the ability to inspire consumers with product and style like
never before.
26
Superdry plc Annual Report 2021 The wider landscape is shifting too, with the dangers of
climate change becoming ever more real, and the plight of
our natural world at risk. It is vital that we all examine what
we do and how we do it, through a sustainable lens. This is
leading to a welcome growth in social awareness, as more
consumers purchase with purpose, demanding brands to
show that they care for and give back to their communities.
For Superdry, this need to connect authentically with
customers is nothing new – we were founded on the principle
of high-quality and accessible style, bringing London vintage
to small market towns in England. We know that by really
understanding our customers, their lifestyle, their aspirations
and behaviours, we can inspire and engage them.
Our customers confidently express themselves through their
style choices. Nuanced differences between consumers’
style choices and their shopping behaviour are important to
understand. Our ‘hyper-segmentation’ approach goes one
step further and breaks down our customers according to
their life stage and mindset. We empower them to express
their unique ‘self’ through their preferred style choice and
collection: Original & Vintage, Studios, Code, X and
Performance Sport each driven to deliver creativity within a
style, fit, quality and innovation.
Our five collections are designed to inspire and engage. We will
create distinct communities of like-minded, style-obsessed
individuals for each collection. This will allow us to actively
engage with them, through multi-channel experiences,
including digital and in-store, in turn creating
a flexible, wide-reaching, and varied network of influence.
To ensure our position as a leading brand, and achieve our
ambition to inspire and engage style-obsessed consumers,
we have defined four objectives which will be delivered
through clear strategic initiatives. Our four objectives are:
• Inspire through Product & Style
• Lead through Sustainability
• Engage through Social
• Make it Happen
You can find out more about the strategic initiatives we have
taken and continue to take to achieve our objectives, in the
next section of this report.
27
Superdry plc Annual Report 2021 Strategic Report → Key Performance Indicators
Our KPIs
Financial
Group Revenue (£m)
£556.1m
Adjusted (loss)/profit before tax* (£m)
YoY Movement (21.1)%
£(12.6)m
YoY Movement (69.9)%
2021
2020
2019
556.1
2021
704.4
2020
871.7
2019
(12.6)
(41.8)
38.0
Statutory (loss)/profit before tax (£m)
Adjusted basic EPS* (p)
£(36.7)m
YoY Movement (78.0)%
(19.4)p
YoY Movement (55.4)%
2021
2020
2019
(36.7)
2021
(166.9)
2020
(89.3)
2019
Basic EPS
(44.0)p
YoY Movement (74.8)%
Closing Net Cash*
£38.9m
2021
2020
2019
(44.0)
2021
(174.9)
2020
(124.2)
2019
(19.4)
(43.5)
32.4
YoY Movement 6.0%
38.9
36.7
35.9
Net Working Capital**
£124.1m
YoY Movement (15.6)%
2021
2020
2019
124.1
147.0
182.0
*
‘Adjusted’ and ‘Net Cash’ are used as alternative performance measures (APMs). A definition of APMs and explanation as to how they are calculated
is included in note 36 to the Group and Company Financial Statements.
** In line with the sharpened strategy, Net Working Capital has been identified as a new KPI in FY21 to provide clarity around the working capital efficiency
as the Group generates increased revenues. Net working capital is defined as inventories plus trade and other receivables less trade and other
payables. The statutory measures from which it is calculated are included within the CFO Review on page 75.
28
Superdry plc Annual Report 2021
Strategic Report → Key Performance Indicators
Operational
In line with our sharpened strategy detailed
within this report, we have updated our KPIs
to better align with the four pillars.
Each KPI is linked to our strategic pillars and we have set out
a description and the rationale behind our choices.
Active Customer Database (m)
2.78m
YoY Movement 3.0%
Social Followers (m)
3.34m
2021
2020
2019
2.78
2021
2.70
2020
2.45
2019
YoY Movement 5.7%
3.34
3.16
2.80
Definition – Number of customers on the Superdry database who have
made a purchase in the last 12 months.
Rationale – A measure of the retention and growth of our customer base
following the segmentation into collections, reflecting improved targeted
marketing and resonance of our improved product.
Definition – Number of unique accounts that have ‘followed’ the main
Superdry accounts across all social channels (Facebook, Instagram,
Twitter, Pinterest and YouTube).
Rationale – A measure of Superdry engagement with customers via
online channels and the ability to convert customers into revenue
either directly (e.g. click through) or indirectly (in-store, increased
brand awareness).
Inventory Days
205.8
2021
2020
2019
Sustainable Product Mix (%)
YoY Movement 16.0%
33%
YoY Movement 16.0%pts
205.8
2021
177.4
2020
174.3
2019
33%
17%
5%
Definition – End of period net inventory/Last 12 months’ cost
of goods sold * 365.
Definition – % volume of ‘sustainably sourced’ product bought within the
current financial year.
Rationale – A measure to track against reduction in overall inventory
through tighter buying practices, carry over of foundation product
(replenishment model) and more efficient use of clearance channels.
Sustainably sourced product defined as organic, low impact and/or
recycled in line with our Environmental Policy.
Rationale – A measure of the level of sustainable product being created
by the Group – a proxy to the environmental impact, rather than revenue
performance. This metric tracks against the ambition to be ‘the most
sustainable listed fashion brand on the planet by 2030’.
29
Superdry plc Annual Report 2021 Strategic Report → Strategy – Inspire Through Product & Style
I n s p i r e
T h r o u g h
Product & style
Our ambition is to create a style-obsessed customer base, and we will
do this by inspiring and engaging consumers.
The Superdry brand is product and design-led, but
everything starts with our people. United by their obsession
with style and their passions aligned with either their
personal style choices or their functional skillsets, it is our
people that will drive us forward. Our designers and creative
teams are completely aligned with each of the five
collections, ensuring that their individual passions align with
the product and style they are creating. Our Centre of
Excellence leads the long-term innovation of Superdry’s
products and ensures we are focused, always, on
progressing our style conversation.
By creating five distinct collections that are defined by
consumer style choices, we aim to bring clarity to our brands’
customer experience and value proposition. This clarity will
allow us to put the right products in front of the right
customers, increasing our chances of achieving our mission
– to inspire and engage them.
Our combination of market-leading quality and design detail,
delivered in-store and online, allows us to continue providing
outstanding product choice and value.
“We are driven by a passion to create
and deliver an organic flow of product
design and style inspiration.”
Creating a style-obsessed consumer base
Our collections are primarily designed to attract teen and
gap year consumers (<25 years of age) with a fashion
follower mindset, as we consider these key growth markets.
Teen
Adventurer
Gap Year
Adventurer
Graduate
Adventurer
Cultured
Adventurer
13→15
16→24
25→34
35+
13→15
16→24
25→34
35+
13→15
16→24
25→34
35+
Superdry target consumers
d
n
e
r
T
r
e
t
t
e
S
i
n
o
h
s
a
F
r
e
w
o
l
l
o
F
t
n
e
d
i
f
n
o
C
m
a
e
r
t
s
n
a
M
i
30
Superdry plc Annual Report 2021
Strategic Report → Strategy – Inspire Through Product & Style
Our collections
Our five collections are centred on consumer style preferences.
Original & Vintage
Superdry Studios
Superdry Code
(Style preference: Casual & vintage)
(Style preference: Sophisticated & minimal)
(Style preference: Sportstyle)
Superdry X
Performance Sport
(Style preference: Energy)
(Style preference: Sportswear)
“Style is a very broad word and something
used to describe so much in the fashion industry.
For me, style is about inclusivity and versatility.
The ability to evolve; something Superdry are
proving effective at as they continue to create and
elevate their collections, providing clothes for everyone
in an industry-admired sustainable manner.”
Elgar Johnson
Deputy Editor and Fashion Director, GQ
31
Superdry plc Annual Report 2021
Strategic Report → Strategy – Inspire Through Product & Style
Provide outstanding product choice and value
We improved our range architecture to better position our brand, create style aspiration and drive sales.
From →
An approach solely
based on gender
and product class
(t-shirts, sweats,
jackets, shirts).
To →
A ‘position and
harvest’
segmentation
product model
targeting specific
consumer profiles.
c.
8,000
PRODUCT
OPTIONS
PER YEAR
3%
7%
40%
50%
Concept collections
The most elevated expression
of our brand
Brand positioning product
The most ‘talkable’ product in the
range, which sets the tone for the
season
Business growth product
Product to target new consumer
segments and an opportunity
to take additional market share
Foundation product
Key volume driving product,
including longer lifecycle
continuity products
To increase perceived value, we are progressively reviewing our pricing strategy with the following principles:
1. Pricing architecture determined by collection/in the context of competitor brands and across focus markets.
2. Reduced discounting to protect margin and brand equity.
3. Differentiated margin structures depending on range architecture position (foundation product etc.).
Our new short-order strategy
To respond quickly to consumer defined opportunities, broaden choice online and increase our ability to trade, we will work
closely with our suppliers to implement an agile short-order process to maintain a competitive advantage.
We will be implementing a short-order strategy with three key aims:
Pure short-order
(<12 weeks)
New product initiatives
(<18 months)
Influencer engagement –
personalised product
• Specific product opportunities within
a collection (i.e. a new dress shape/
graphic language)
• Broader product initiatives within
a collection (i.e. new vegan retro
trainer range)
• Using the short-order process to create
bespoke products for influencers to
promote on their social media accounts
• Product delivered in-season – averaging
• Product delivered in less time than the
• Key influencers for each collection have
less than 12 weeks’ turnaround
standard 18 month critical path
• Focus on distribution through the
Ecommerce channel (increasing
choice online)
• Focus on consumers under 25 years old,
females, with a fashion-follower mindset
• These product initiatives have the
potential for broader distribution
including through Ecommerce, physical
retail and wholesale
• Broader consumer target – potential
across all life stages and genders
the opportunity to personalise a
product, such as organic cotton t-shirts
or hoodies, as an exclusive value
proposition for their followers
• Focus on distribution through the
Ecommerce channel – directed from
influencers’ social media accounts
• Focus on consumers under 25,
all genders, and with a fashion-
follower mindset
32
Superdry plc Annual Report 2021
Strategic Report → Strategy – Inspire Through Product & Style
Deliver inspiring brand experiences
Our focus on consumer segmentation means we can create inspiring brand experiences, which target specific consumer
segments both digitally and physically.
DIGITAL EXPERIENCES
PHYSICAL EXPERIENCES
STYLE-LED
NAVIGATION
Customers able to shop
by style and product class.
Including fully immersive
digital SIS (Shop in Shop)
experiences.
PREMIUM PRODUCT
PRESENTATION
Product models relevant to
target consumers, premium
product photography
curated to enhance
shopping experience.
COLLECTION
EXPERIENCE
A defined customer
experience tailored to
deliver the best expression
of each collection.
STYLE-OBSESSED
TEAMS
Recruit style-obsessed
store teams and inspire
current teams so they can
inspire our customers.
INSPIRING EDITORIAL
CONTENT
An online Style Editorial with
regularly updated articles
all relating back to product,
style and culture.
ELEVATED
MEMBERSHIP VALUE
PROPOSITION
A ‘Style Key’ membership
programme accessible
through the website offering
consumers exclusives
and early access.
RIGHT PRODUCT
RIGHT PLACE
Profiling and ranging
of collections through
enhanced consumer
understanding
and analytics.
MASTER ‘CRM’
IN STORES
Help our people build
personal and curated
relationships with our
customers through
a CRM tool.
33
Superdry plc Annual Report 2021 Strategic Report → Strategy – Engage Through Social
E n g a g e
T h r o u g h
S o c i a l
We are building on ‘social-first brand marketing’ to attract younger,
fashion-follower customers, and to ensure sustained engagement
across our different platforms.
Social media has levelled the playing field when it comes to
sharing product and style content with style-obsessed
communities on a global scale. This also applies to the
consumption of content which is now, literally, at consumers’
fingertips. We embrace this by engaging specific
communities built around different aspirational lifestyles,
segmented by style choice, and aligned to our collections.
Our affiliate influencer programme delivers authority and
credibility to the five collections and ensures we are an
active part of our ‘hyper-segmented’ communities. We
collaborate with style advocates who are aligned with our
collections and their respective values. Our focus on building
earned content with such influencers will allow us to reach
new audiences in an authentic way.
Achieve best in class social engagement
To compete and attract a younger, fashion-follower
consumer, we need to enhance our social media messaging:
Ecommerce will drive a large proportion of our future growth.
It is essential that we provide our customers with a leading
Ecommerce experience that goes beyond simple
transactions, and aids the pursuit of our brand mission.
To ensure we stay true to our social engagement
commitment, we measure success through clear targets
including social followers, engagement and web conversion
rates, online traffic and our active customer database.
“We are an active part of our
hyper-segmented communities.”
1. Move from top-down traditional retail-first
communications to bottom-up social-first communication.
Land the message in social channels and extend
out through retail channels.
2. Engage in messaging segmented by each collection –
tailored by social channel, consumer collection
preferences and affinities.
3. Focus on obtaining earned content to build credibility by
borrowing authority through a mix of influencers, creators,
thought leaders, publishers, user generated content and
affiliate advocates, reaching audiences outside our
current community.
34
Superdry plc Annual Report 2021 Strategic Report → Strategy – Engage Through Social
Building an influencer strategy
We will build a hierarchy of talent types that are fully
engaged with each of our five collections to deliver reach,
consideration and conversion in an authentic way. These
influencers will form part of our collections’ communities and
be as passionate about sustainability as we are.
The best performing influencers will be retained directly to
build an ‘army’ of advocates for each collection, consumer
group and commercial activity.
We will create our own affiliate influencer programme,
remunerating participants based on sales attributable
to them.
SEE
(reach)
MACRO
500k+
followers
MID TIER
100k – 500k followers
THINK
(engagement)
N
TIO
A
TIV
C
F A
F
E-O
N
O
‘A list’ talent to drive reach, credibility,
awareness and engagement with
new audiences, and reappraisal with
existing community.
Deliver consideration through authority and
credibility by association.
MICRO/NANO
500-99k followers
DO
(return)
Earned channels to enable segmented
simultaneous collection-specific
consumer conversation.
Provide a leading Ecommerce experience
We will improve our Ecommerce capabilities by prioritising a web platform upgrade, which will allow further enhancements
to be made to website basics, sales and conversion, and customer satisfaction.
Website basics
Sales & conversion
Customer satisfaction
→ Recently viewed items
→ Personalised emails
→ Faster site performance
→ Store stock checker
→ Personalised homepage
→ Smoother scrolling
→ Next day delivery filter
→ Mobile first
→ Personalised guides
→ Keep items in basket
after session expires
→ Faster checkout
→ Abandoned cart follow up
→ App notifications
→ Customer segmentation
→ Before you go messaging
→ Create community
→ In-pack messaging
including returns
information
→ Shipping updates
35
Superdry plc Annual Report 2021 Strategic Report → Strategy – Lead Through Sustainability
L E A D
T h r o u g h
S U S T A I N A B I L I T Y
At Superdry we have an obligation to make better choices. The urgency of the climate crisis has
broadened how we think about ourselves and the way we approach business. We want to effect
positive change for the present and future generations and build a positive environmental
legacy. Our ambition is to ‘become the most sustainable listed global fashion brand by 2030’.
We are a business that is passionate about doing
the right thing. That means doing what is right for our
consumers, our products, our colleagues, our partners
and perhaps most importantly, our planet. It is through the
commitment and passion of everyone at Superdry that we
will achieve our ambition.
Our sustainability strategy is built upon three key pillars:
achieving net-zero carbon emissions, maximising the use of
low impact materials, and leading positive change across our
value chain. We are committed to supporting the Paris
Agreement, in playing an active role in limiting global
temperature rises to 1.5⁰c.
The challenge ahead of us won’t be easy. We know we don’t
have all the answers and that success will depend on us
forming strong partnerships. Whilst we are worried about the
climate crisis facing the planet, we are confident that we will
collectively find ways to reverse the current climate trend.
The time for action is now, and our strategic plan is already
well underway.
This year we are proud to have won the Drapers Positive
Change Award and topped the Financial Times Europe’s
Climate Leaders 2021 leader board. Our CEO also received
the Soil Association’s 2021 BOOM (Best of Organic Market)
award for Best Organic Ambassador for organic initiatives at
Superdry, as well as within his wider business portfolio. This
is great recognition of our sustainability journey thus far.
Our first dedicated Sustainability Report, published in
September 2021, provides additional detail on everything we
have committed to, achieved, and ultimately challenged
ourselves on in the past year. For more information visit
corporate.superdry.com.
Drapers Positive Change Award
Financial Times Europe’s Climate Leaders 2021
Best of Organic Market Award 2021
36
Superdry plc Annual Report 2021 Strategic Report → Strategy – Lead Through Sustainability
Low impact materials
Our vision for clothing made solely from low impact materials
lies in our knowledge that it is the right thing to do. Organic
farming regenerates ecosystems by building healthy soil that
draws more carbon back into the ground, uses less water,
and is safer for all involved. It also pays a better and more
consistent livelihood to farmers.
We are also building our fully traceable supply chains
back to the farmer, partnering with the Organic Cotton
Accelerator (OCA) – utilising cotton from farmers who are
supported by Superdry training partners to help them
on their organic cotton journey, as well as securing our
future organic supply routes.
We will be tracking our progress utilising three core KPIs:
Volumes of ‘sustainably sourced’ product bought: In
FY21, one in three garments contained organic, lower impact
or recycled materials; by 2025 we will see this build to two
thirds of our garments including all ‘pure’ cotton, on our
journey to 100% organic cotton by 2030. We are driving
forward our ambitious plans to convert non-cotton garments
to low impact or recyclable alternatives.
Water reduction: We aim to reduce the water we use in
producing our garments by 40% by 2030, with an interim
target of 20% by 2025. This will be achieved using water
saving technology in our factories and wet processing sites
and converting to materials with a lower water footprint.
We plan to measure our full product water footprint from
FY22, utilising the HIGG Index and by working with our
suppliers to measure usage.
Packaging converted to recyclable, reusable or
compostable: As a signatory to the New Plastics Economy
Global Commitment, we are tracking our journey utilising
industry-leading targets and ensuring packaging solutions
drive practical and scalable improvements. In FY21 we were
tracking at 93% against our 100% ‘recyclable, reusable or
compostable’ target.
37
Superdry plc Annual Report 2021 Strategic Report → Strategy – Lead Through Sustainability
Net zero emissions
Superdry has set a commitment to reach net zero carbon
emissions by 2030. We are changing the way we do things:
in fields, factories and stores. This will mean using more
efficient technology, renewable energy, and changing how
products are distributed.
The Financial Times’ inaugural Europe’s Climate Leaders
2021 table placed Superdry at the top of the list of the 300
companies across Europe that have achieved the greatest
reduction in their greenhouse gas emissions intensity – for
reducing our year-on-year core emissions by more than 50%
between 2014 and 2019.
Taking collective action to limit global warming in line with
the Paris Agreement (2015) to 1.5°c, in May 2021 we joined
the UN Fashion Industry Charter for Climate Action to lead
the way to a low carbon future. We will also continue to
publish our CDP response, and aim to reach an A grade
by 2023.
We know there is a lot more to do; we will continuously
challenge ourselves and our partners to minimise our energy
footprint, convert to renewable alternatives, and to
meaningfully offset any remaining emissions.
• Renewable energy – we already have 100% renewable
electricity in our own Head Office and Retail stores. By
2025, our stores, offices and global distribution and
consolidation centres will be powered by 100%
renewable energy.
• More efficient technology – working across the
business, we have already reduced our energy usage in
our global Retail stores and offices by 35%. Setting
ourselves a new target this year, we will be optimising
100% of our estate achieving a further 25% reduction
by 2025.
• Changing how products are distributed – having
reduced our airfreight by 52% since FY19, we plan to cap
airfreight at a maximum of 2% per year from FY22. Making
better decisions at the right time means we can
significantly reduce our indirect emissions.
38
Superdry plc Annual Report 2021 Strategic Report → Strategy – Lead Through Sustainability
Lead positive change
As a global business, we know we can touch
the lives of many people. We are committed
to treating everybody equally and fairly. We lead
positive change because it’s the right thing to do.
FARMER TRAINING
Converting 20,000 farmers to organic
practices by 2025 – working with our
suppliers and with market-leading organic
training organisations, we will ensure all
organic farmers, or farmers in conversion
to organic farming, earn a premium for
their cotton while being provided
with the tools they need to grow
organic cotton sustainably.
SUSTAINABILITY WARRIORS
Engaging colleagues across the business
we have established our Sustainability
Warriors – 50 colleagues operating through
all departments taking the lead
on sustainability.
Leading positive change, we continue to
share our journey through our Truth series
at corporate.superdry.com, as well as
tracking wider metrics including premium
access for organic farmers and wage levels
in our Tier 1 factories from FY22.
39
RESPECT AND DIGNITY
Building on the work we have undertaken
to support fair and safe conditions in our
supply chain, we will ensure all workers
operating in our third party Tier 1
factories have the means to raise issues
and address inequality through our
Respect and Dignity programme.
Superdry plc Annual Report 2021 Strategic Report → Sustainability Report
Our sustainability performance
Transparency is a core component of our roadmap.
This section provides further information on how we are
measuring progress for each of our sustainability initiatives,
while continuing to identify and manage environmental and
human rights risks within our business and third party
operated supply chain.
This report is prepared in accordance with the EU’s Non-
Financial Reporting Directive (NFRD).
This section covers:
1. Sustainability KPIs and their associated
assumptions/methodology.
2. Additional mandatory compliance information disclosures.
For further information about our sustainability journey,
please refer to our dedicated Sustainability Report at
corporate.superdry.com
Key Performance Indicators (KPIs)
Within this section we provide our performance and further information on how we have calculated our KPIs.
FY17 –
Baseline
FY19
FY20
FY21
FY22
GOAL
(2025)
GOAL
(2030)
% Product volume converted to organic,
in transition and recycled cotton
1 Product containing organic, recycled and
lower impact materials
% Packaging converted to recyclable,
reusable or compostable alternatives
2 Packaging converted to recyclable,
reusable or compostable alternatives
Supply chain waste
3 % Water recycled out of the production process
Renewable energy
4 % Renewable energy used in our stores,
offices and distribution partner sites
Net zero carbon emissions – Scopes 1, 2 & 3
TOTAL EMISSIONS (tCO2e)*
5 % Change in normalised emissions
(tCO2e/ £million)
% Change in total emissions (tCO2e)
Leading positive change
6 Organic farmer conversion –
Total # farmers enrolled in training
7 % Factory workers engaged in Respect
and Dignity programme
5%
17%
33%
39%
65%
96%
–
–
90%
93%
95%
100%
100%
–
– Baseline
20%
40%
55%
75%
79%
84%
90%
100%
100%
76,776
99,679
38,865
33,308
–
–
-46%
-49%
-41%
-57%
–
–
–
–
–
-60%
-100%
–
–
–
869
1,824
6,500
20,000
11%
13%
18%
50%
100%
* Market-based emissions reporting will account for the use of renewable electricity at an emission factor of 0gCO₂e/ kWh.
See below for more detail on how this metric is calculated.
LOW IMPACT MATERIALS
SUSTAINABLE PRODUCT MIX
This target is tracked on the volume of product bought within
our financial year. For FY21, this covers our AW20 and SS21
seasons and their associated capsules:
• Certified organic cotton represents 30% of our
cotton range.
• Certified recycled content, Responsible Down Standard
(RDS) or wider sustainable materials including Tencel,
linen and hemp represents 36% of our non-cotton range.
Our Environmental Policy defines materials included within
our Sustainable Product Mix KPI in line with Textile
Exchange’s Preferred Fibre and Material Exchange Index.
We separately report our MT per fibre type on our corporate
site for organic cotton, recycled and low impact materials.
PACKAGING
Aligning with the Ellen Macarthur Foundation’s New Plastics
Economy Global Commitment (NPEGC), we track our packaging
KPI annually utilising their reporting methodologies.
• We report our figures based on packaging that is
practically recyclable, reusable and compostable.
• We have updated our figures in line with updated guidance
from the NPE defining ‘practically recyclable’, the FY20
figure has therefore reduced to 90% (from 91% reported).
40
Superdry plc Annual Report 2021 Strategic Report → Sustainability Report
WATER USE
We are currently mapping the water used through the full
production process and plan to start reporting this KPI
from FY22.
NET ZERO EMISSIONS
CARBON EMISSIONS REDUCTION
We have reported on all energy and carbon emission sources
required under both the Companies Act 2006 (Strategic
Report and Directors’ Reports) Regulations 2013 and the
Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018
(the 2018 Regulations) which implement the Government’s
policy on Streamlined Energy and Carbon Reporting (SECR).
This year, we completed a biennial verification of both FY20
and FY21 emissions declared within Tables 1, 2 and 3. This
verification was undertaken by Avieco Ltd to the ISO
14064-3:2019 standard. Their full statement of verification
can be seen at corporate.superdry.com.
For Scopes 1 and 2, we report our emissions data using a
‘financial control’ approach, which means we include
emissions from all parts of the business where we have
direct financial and operating policies, including our owned
and operated retail stores and office space.
Scope 1: Direct use of fuels within our owned Company
facilities
Total usage was 182 tonnes CO2e from the direct
combustion of fuels, most notably natural gas. During FY21,
we switched our UK gas supply to ‘green gas’ through a
Renewable Green Gas Certificate (RGGO) supply.
Scope 2: Purchased electricity, steam, heating and
cooling for own use within our owned Company facilities
We have sourced electricity use across our global owned
operations from 100% renewable sources since FY18.
The below table provides further detail on our location-based
Scope 1 and 2 emissions, which use a ‘grid average’
greenhouse gas (GHG) emissions for all generating
technologies. This provides us with insight into where our
largest climate impacts are, to set appropriate and
positive ambitions.
SCOPE
1
2
1+2
1+2
LOCATION-BASED
Combustion of fuel and operation of facilities (tCO2e)
Electricity, heat, steam and cooling purchased for own use (tCO2e)
TOTAL (tCO2e)
EMISSIONS PER £1M SALES REVENUE (tCO2e)
% CHANGE
AGAINST
BASELINE
-51%
-51%
-51%
-33%
FY21
182
4,738
4,920
8.8
FY20
163
7,264
7,426
10.5
FY17
(Baseline)
369
9,598
9,968
13.3
Table 1: Superdry greenhouse gas emissions, Scopes 1 and 2 (location-based) – absolute and normalised by sales revenue.
The reported carbon dioxide emissions that relate to the UK and offshore area is 42.3% (2,082 tonnes CO2e; location-based).
The below table provides further detail on our market-based
Scope 1 and 2 emissions. Our market-based emissions
reporting accounts for our use of renewable electricity with
an emission factor of 0gCO2e/ kWh.
The remaining 150 tonnes CO2e relate to a small volume
of heating and cooling purchased for certain stores, where
we are not yet able to switch the source of energy to
renewable directly.
We have reduced our Scope 2 emissions by 95% between
FY17 and FY21 – from 3,112 to 150 tonnes CO2e, by
exclusively using renewable electricity within our store and
Head Office estate.
Our absolute Scope 1 and 2 emissions have decreased by
8% year-on-year; however, due to the impacts of Covid-19
our revenue has reduced by 21%, which has resulted in an
increase in our normalised emissions (0.6 tonnes CO2e per
£million revenue in FY21 vs. 0.5 in FY20).
SCOPE
1
2
1+2
1+2
MARKET-BASED
Combustion of fuel and operation of facilities (tCO2e)
Electricity, heat, steam and cooling purchased for own use (tCO2e)
TOTAL (tCO2e)
EMISSIONS PER £1M SALES REVENUE (tCO2e)
% CHANGE
AGAINST
BASELINE
-51%
-95%
-90%
-87%
FY21
182
150
332
0.6
FY20
163
200
362
0.5
FY17
(Baseline)
369
3,112
3,481
4.6
Table 2: Superdry greenhouse gas emissions, Scopes 1 and 2 (market based) – absolute and normalised by sales revenue.
The proportion of carbon dioxide emissions that relate to the UK and offshore area is 27.8% (92 tonnes CO2e; market-based).
41
Superdry plc Annual Report 2021 Strategic Report → Sustainability Report
Scope 3 – Voluntary: Indirect emissions associated with
upstream and downstream activities in our value chain
Recognising our ambitions to achieve net zero carbon
emissions, we have disclosed all Scope 3 emissions
categories currently measured – ‘fuel related activities’,
‘upstream distribution & transportation’, ‘staff business
travel’, ‘upstream leased assets’ and ‘franchises’.
We are aware of the importance that Scope 3 emissions
have on understanding our complete emissions inventory,
which is why during FY22 we will be undertaking a full Scope
3 analysis across all 15 categories. This will provide us with a
better understanding of our impact as well as allowing us to
start tracking improvements which we are already
undertaking in those areas.
• We have seen a 62% reduction in our Scope 3 upstream
distribution & transportation emissions compared to our
FY17 baseline. This is due to a significant reduction in
airfreight of 52% since FY19 (and 62% since FY17), by
switching to sea freight to get our goods from factory to
distribution centre. We have also made improvements to
other modes of transport: in Belgium we have switched
39% of shipments to our distribution centre from road to
river barge; and in Turkey we have introduced lower
carbon transport modes (sea and rail) for half a million
garments, reducing our reliance on road transport.
• Across the other four Scope 3 categories that we report
on, we have also seen year-on-year reductions, including a
93% reduction in our staff business travel emissions, due
to the impacts of Covid-19.
SCOPE
3
3
MARKET-BASED
TOTAL EMISSIONS (tCO2e)
EMISSIONS PER £1M SALES REVENUE (tCO2e)
Table 3: Superdry Scope 3 greenhouse gas emissions, absolute and normalised by sales revenue.
% CHANGE
AGAINST
BASELINE
-55%
-39%
FY21
FY20
FY17
(Baseline)
32,976
38,502
73,294
59.2
54.7
97.5
GHG EMISSION METHODOLOGY
Data utilised in Tables 1, 2 and 3 is reported for each full
financial year, which runs from 1 May to 30 April. Data has been
prepared in accordance with the WRI/WBCSD GHG Protocol
Corporate Accounting and Reporting Standard (revised
edition), WRI/WBCSD GHG Protocol Scope 2 Guidance 2015,
WRI/WBCSD Corporate Value Chain (Scope 3). We calculate
our direct emission figures using actual consumption data from
smart meters and accurate meter reads/invoicing. However,
access to this type of data is not always possible; in FY21 12% of
our direct emissions were calculated from estimated
source data.
ENERGY CONSUMPTION
The scope of our energy reporting includes all our direct energy
consumption associated with our Scope 1 and 2 emissions
reporting. We measure our energy performance through
absolute consumption and an efficiency measure using both
our total floor area occupied and our annual revenue.
Our absolute energy use decreased, both on the prior year
(FY20) by 22.5% and our baseline year (FY17) by 27.9%. This is,
mostly, due to the impact of Covid-19, which impacted our
global business operations significantly at various points for the
whole of our financial year, notably through store and
office closures.
We previously set a goal to improve energy efficiency (kWh/m₂)
across our global retail estate by 35% by 2020 compared to a
FY14 baseline. We met and exceeded that goal last year (FY20)
with a 38.5% reduction.
Total Global Energy Use (MWH)
Global Energy Efficiency (KWH/M2)
Global Energy Efficiency (MWH/£M)
We have therefore, as part of our strategy update in FY21, set a
new target of a 25% reduction in total energy used across our
global operations (retail and offices) by FY25, compared with a
FY17 baseline.
As can be seen in Table 4, our FY21 results indicate we have
already met this target with a 33.5% improvement, however this
KPI will be significantly skewed by the impacts of Covid-19, and
we therefore expect this to rise next year (FY22).
ENERGY EFFICIENCY
We are also working to reduce our overall energy footprint
utilising efficiency measures. To date we have installed
LED lightbulbs in 45% of our stores, saving 3.5 million kWh per
annum; and Building Management Systems (BMS)
panels (controlling lighting, heating, and cooling across
55% of our store estate – with an average saving of approx.
20% (26,000kWh) per store per annum.
In January 2021, we approved a three-year capex investment
programme to extend energy optimisation technologies – LED
lighting and BMS, designed to control energy intense
equipment – to 100% of our owned stores.
RENEWABLE ENERGY
This KPI relates to energy used in our stores, offices and
distribution/consolidation network. We account for
renewable energy contracts, certification through Energy
Attribute Certificates (EACs), and on-site generation.
% CHANGE
AGAINST
BASELINE
-27.9%
-33.5%
-2.7%
FY21
FY20
FY17
(Baseline)
19,337
24,946
26,837
150.5
34.74
183.0
35.42
226.4
35.69
Table 4: Superdry Global Energy Use. This table refers solely to energy used within Superdry direct global operations across our stores and offices. Data
reported for each full financial year runs from 1 May to 30 April. The proportion of energy consumption reported that relates to the United Kingdom and
offshore area is 45.9% (8,532,673 kWh electricity, 72,535 kWh gas). Our energy consumption inventory comprises 4% direct combustion of natural gas,
3% supplied heating and cooling and 93% electricity.
42
Superdry plc Annual Report 2021 Strategic Report → Sustainability Report
LEADING POSITIVE CHANGE
RESPECT AND DIGNITY
We work with third party manufacturers to produce our
products. We have a dedicated ethical trading function
and strict standards in place to ensure these manufacturers
are operating factories that meet our baseline Code of
Practice requirements.
Our Respect and Dignity KPI builds on baseline ethical
compliance standards, and establishes systems to enable
workers to raise issues and address inequality.
Utilising third party local experts including Swasti and
Change Alliance, all factories that have undertaken Respect
gender empowerment programmes are baselined in line
with the UN Women’s Empowerment Principles (WEP).
By tracking the percentage of workers enrolled in this
programme, we can more accurately track progress in
line with Guiding Principles and report our progress in
line with Sustainable Development Goal 5 (SDG 5,
Gender Empowerment).
FARMER TRAINING
All farmers participating in our organic cotton conversion
training programme are registered with the Organic Cotton
Accelerator (OCA), who track the impact of the training and
validate the payment of the organic or organic in conversion
premium to farmers.
ADDITIONAL MANDATORY COMPLIANCE
DISCLOSURES
The below section provides additional material updates
pertinent to our mandatory compliance disclosures as
well as links to relevant information available at
corporate.superdry.com.
RISKS AND OPPORTUNITIES
Superdry aims to take a leading position both in addressing
some of the most critical risks, and in seizing the
opportunities arising in the fashion industry, using our size
and innovative approach to influence change.
While our sustainability strategy is designed to leave a
positive legacy, we have processes in place to identify,
assess and respond to ongoing and emerging climate,
human rights and wider environmental risks, to enable us to
address our impacts effectively. Our Risk Management
Policy and accompanying Risk Management Framework
account for both Superdry’s activities as well as the
environment in which we operate, accounting for our
business structure.
Our supply chain is outsourced to third party suppliers
and factories. We are aware that this business model
presents human rights and environmental risks and have
established mechanisms to closely monitor these risks –
the selection of factories for production, ongoing
monitoring of their compliance to our policies and, if
required, responsible exit should any major non-
conformities be identified and not remedied.
43
We have published all relevant policies and provide
further detail on how we monitor our supply chain at
corporate.superdry.com.
Material climate and human rights related risks are included
in ‘How We Manage Our Risks’ on page 56. Superdry will be
required to align with the Task Force on Climate-related
Financial Disclosures (TCFD) from our FY22 report. We will
also take TCFD into account within our CDP report later this
year, which will be available at corporate.superdry.com.
GOVERNANCE
Superdry has a robust governance framework in place to
ensure effective oversight, ownership and accountability for
the implementation of our sustainability programmes. This
includes Board and Executive level ownership and
accountability, with six monthly reporting to our Audit
Committee in line with our Risk Management Framework.
We have established teams dedicated to the delivery of our
sustainability programmes, as well as a group of 50
Sustainability Warriors to provide a collective voice to drive
change across the brand.
Full information on our governance and general follow up
procedures for environmental, human rights and
sustainability is provided at corporate.superdry.com.
SUPERDRY’S COMMITMENT TO HUMAN RIGHTS
We respect and uphold human rights wherever we operate
and are aware that risks can arise within our own business
and supply chains.
Our approach to human rights is guided by the UN Guiding
Principles on Business and Human Rights (UNGPs), in
adopting the principles of leveraging change and utilising
effective due diligence and remedial actions to detect and
manage risk. Our Code of Practice represents our baseline
requirements, and wider human rights policies work
alongside local laws to ensure a minimum standard of
protection is afforded to our colleagues, and for our supply
chain partners to uphold in relation to their employees.
We review our core human rights risks annually and publish
our assessment at corporate.superdry.com, alongside wider
policies designed to provide additional protection to
vulnerable workers.
Supporting our human rights commitment is our Modern
Slavery Statement. This is published in line with the UK
Modern Slavery Act and the California Transparency in
Supply Chains Act (2010) and is available on our corporate
website at corporate.superdry.com.
Superdry plc Annual Report 2021 Strategic Report → Strategy – Make It Happen
M a k e
i t
H a p p e n
Executing our strategy all starts with our amazing people who, together, create our unique
Superdry culture. We are proud of our strong and diverse community, full of talent, drive and
desire to inspire and engage our style-obsessed consumers while leaving a positive
environmental legacy.
We encourage everyone at Superdry to bravely challenge the
status quo. Founded by a truly inspirational entrepreneur,
the spirit of adventure is at the forefront of Superdry’s
heritage and is a fundamental part of who we are today.
Everyone in the Superdry team is supported to be their best
self and is empowered to push their own limits. Our values
have been defined with this in mind; they help shape our
character and personality, and guide us in everything we do,
every day. Please turn to ‘Our People’ on page 48 to find out
more about our amazing people.
Further information can be found in:
‘Our People’ on page 48
We know we work better together, and so we reward our
team for their contribution to Superdry’s success. Cross-
functional collaboration is crucial to ensure we achieve our
objectives and take the brand forward.
Our integrated ‘Go to market’ strategy ensures our team
collaborate to get the right product to market in the right
place, at the right time, to deliver our brand’s best
expression and ensure we are creating inspiring customer
experiences consistently.
We are conscious that in order to continue inspiring and
engaging consumers we need to be able to leverage
technology more and more. We are investing in core systems
fit for the future, and through our technology transformation
journey, we will harness the power of data to maximise
efficiency and gain the right insights.
MAKE IT HAPPEN
Inspire our workforce through
the spirit of adventure
A fully integrated
‘Go to market’ strategy
Establish core systems
and data insight
44
Superdry plc Annual Report 2021 Strategic Report → Strategy – Make It Happen
Inspire our workforce through the spirit
of adventure
Central to our success is being able to build a strong and
diverse organisation, full of amazing talent. We are looking to
build on this through:
Diversity and inclusion
We are recruiting from as wide a talent pool as possible to
ensure that there are no barriers to entry or progression.
Opportunities
Kick start careers for young people (<25) in fashion through
apprenticeships and work experience.
Partnering
A UK shared service model and business partners bringing
agile thinking to business teams.
Reporting and insight
Make decisions using a clear and consistent measurement
framework and publish key data.
Talent development
Everyone, everywhere has the opportunity to access
role-specific learning, underpinned by an agile prioritisation
and personal development framework.
Society
Ensure colleagues have a greater voice and impact through
two-way feedback and employee consultation.
Further information can be found in:
‘Our People’ on page 48
Our values are:
We do it together
We do it by being real
We do it with passion
We do it with fearless creativity
and the spirit of adventure
Survey result
78%
of colleagues are proud to work
for Superdry
76% agree that the culture at Superdry
is a ‘good fit’ for them
Survey result
45
Superdry plc Annual Report 2021 Strategic Report → Strategy – Make It Happen
A fully integrated ‘Go to market’ strategy
We will become more efficient with our stock, which will free up cash flow from our working capital cycle. This in turn can be
deployed as investment for key strategic initiatives. Achieving this requires a fully integrated ‘Go to market’ strategy to ensure
our seasonal planning and execution is first class, and our customer experience across channels consistently inspires and
engages consumers.
Seasonal planning and execution excellence
• Create freshness through short-orders, giving us the
ability to test products and re-buy best-selling styles.
opportunities to reduce buying risk and increase stock
cycle efficiency.
• Leveraging data through AI & DI to ensure we are
• Deliver continuity through foundation product that can be
allocating stock to the right locations more intelligently.
bought on a regular buying pattern to even out intake
profiles and stock cover.
• We have identified multiple improvements in our buying,
merchandising and wholesale processes that can unlock
• Maximise the flow of product at full price through
positioning the stock in the most brand enhancing and
profitable way.
Segmented multi-channel experiences
Each channel has its own reason for being, each offering the customer a unique brand and shopping experience. This creates a
flexible, wide-reaching and varied distribution network with channels which do not negatively impact each other.
The key to unlocking market opportunities is our ability to create authentic, inspiring and engaging experiences for each of our
five collections – understanding the differences in how each of the hyper-segmented consumer targets behave across
channels will be key to achieving our ambitious growth.
STORES
Physical brand
experience and
availability
Through our stores, we provide:
→ Product interaction
→ Brand environment immersion
→ Consistency
→ Best seller availability
→ Local market awareness
→ Human interaction
ECOMMERCE
Full brand
expression
and ultimate choice
WHOLESALE
Market
access
and awareness
Through our Ecommerce channels, we
provide:
Through our wholesale channels,
we provide:
→ Social amplification
→ Full product offer
→ Market position/adjacencies
→ Product category consideration
→ Branded editorial content
→ Credibility through association
→ No geographic limits
→ Capital light
→ Collection themed ‘zones’
within stores offering
collection immersion
→ Collection merchandising to ensure
most locally relevant product
reaches stores
→ Single collection store tests which,
if successful, will be rolled out to
access new markets
→ Collection enabled navigation
→ Segment current customer base
→ Product shots differentiated
by collection
→ Collection landing pages with
editorial content
→ Click-through links from social
channels to collection
pages/product
by collection based on end
consumer profile
→ Target new customers with single
collection ranges
→ Mix of product determined by
how brand enhancing the account
is which determines level of product
available from foundation to
pinnacle collections
46
Superdry plc Annual Report 2021 Strategic Report → Strategy – Make It Happen
Establish core systems and data insight
We have recruited a Chief Technology Officer to lead our technology transformation programme.
We recognise the need to continuously update our core systems and processes to maximise efficiency, improve customer
experience and ensure the business is set for future growth.
Our priorities and how we aim to achieve them are set out below.
Technology roadmap priorities
Merchandising system replacement
Replacement of our existing merchandising and sourcing system, to improve our
core product management capabilities.
Ecommerce re-platform
Replacement of our existing Ecommerce platform allowing for increased agility,
flexibility and speed in how we develop our Ecommerce capabilities for the future.
System integration platform
Upgrade of our central system integration platform, allowing increased
connectedness and alignment between our various operating systems throughout
the business, improving efficiency and ensuring one version of the truth.
→ Wholesale CRM system
→ Radio-frequency
identification (RFID)
enhancement
→ Customer app
→ Single stock pool
completion
→ Distribution centre
automation
→ Store stock optimisation
47
Superdry plc Annual Report 2021 Strategic Report → Our People
O u r
P e o p l e
Superdry continues to be a truly diverse global community. We employ 3,782 colleagues across
17 countries (as at 24 April 2021). Whilst most of our workforce are young (71% are under 30
years of age) we are a multi-generational team.
Our generations
Global Head Office
Global Retail
Generation
# Colleagues
Traditionalists - pre-1945
Boomers - 1946-1964
Gen X - 1965-1980
Gen Y - (Millennials) 1981-1995
Gen Z - 1996-2010
Grand total
Our countries
United States – 469
0
19
196
511
114
840
Austria – 58
Belgium – 114
Denmark – 44
France – 128
Germany – 409
%
0%
2%
23%
61%
14%
22%
# Colleagues
0
4
101
1,128
1,709
2,942
%
0%
0%
3%
38%
58%
78%
Total
0
23
297
1,639
1,823
3,782
Grand total
3,782
Number of colleagues
Hong Kong – 24
India – 14
Ireland – 85
Italy – 70
Netherlands – 89
Norway – 2
Portugal – 6
Spain – 46
Sweden – 18
Turkey – 17
United Kingdom – 2,189
48
Superdry plc Annual Report 2021 Strategic Report → Our People
Gender
Gender identity
Female
Male
Non-binary
Unknown
Total
Global Head Office
Global Retail
# Colleagues
492
348
840
%
59%
41%
0%
0%
# Colleagues
%
Grand total
1,747
1,191
1
3
2,942
59.38%
40.48%
0.03%
0.10%
2,239
1,539
1
3
3,782
FY20 and FY21 have seen unprecedented change and challenge, and during this time we have continued to put our colleagues
at the forefront of our communications and decisions. We know that our colleagues are critical to Superdry’s success and are
the people who make it happen. We are proud that our teams have shown tremendous resilience, camaraderie and leadership.
Culture
As Superdry returns to its design-led roots,
continuing to grow a unique culture is a core
part of our People vision.
During FY21, and in partnership with colleagues across all
parts of our business, we revisited our values, which were
originally launched in 2017, and refined them to further
reflect our brand. To articulate this and engage colleagues,
we created the Superdry Playbook: a simple recipe for who
Superdry is and what to expect, no matter what job level,
country or role. From our position on leadership, to how we
engage with communities, the Playbook is intended to align
our colleagues behind a shared aspiration and to give
freedom within a framework.
Our evolved values are at the heart of the Superdry Playbook.
We know that a team that embodies our values of passion,
being real and doing it together, underpinned by a true
spirit of adventure will help to drive our business forward as
we attract new, highly talented colleagues and keep our
existing colleagues engaged as we grow.
49
Superdry plc Annual Report 2021
Strategic Report → Our People
Throughout the recent difficult economic and trading
environment, we have continued to put colleagues at the centre
of what we do. Some of the actions taken include:
• Engaged with, and encouraged feedback from, our
colleagues around key issues through our Pulse Surveys on
Diversity and Inclusion, Well-being, Learning and
Development, and Engagement and Culture. Through these,
we have taken into consideration over 2,000 individual
viewpoints and using this information, we have committed to
take the feedback from the SD Voice (our colleague
engagement forum) on board;
• Granting c.550 additional global colleagues, including our
store leaders, restricted share awards through the
Superdry Leadership Share Plan. This share grant1, in
October 2020, was designed to provide a greater number of
colleagues a chance to share in the future success of
Superdry. For those not included in this Plan, we delivered
£100 of Superdry vouchers in December 2020 as a ‘thank
you’ in consultation with the SD Voice;
• Working in partnership is part of the Superdry culture. In
FY19 we launched the SD Voice for Retail and Head Office,
represented by nine and 17 elected colleagues respectively.
Over the last 12 months, we have worked closely with this
group on a number of topics including business restructuring,
communications, Covid-19 policies, recognition and strategy.
The SD Voice is supported by our designated independent
NED for employee representation, Helen Weir. The group
also had the opportunity to present their involvement,
reflections and priorities to the Executive Committee and to
the Board (please refer to the Governance section starting on
page 84 for further details of Board and Committee
activities). Employee engagement forums have also been
extended globally, and in April 2021, elections were held in
the USA for the first SD Voice, USA. This will be extended to
our EU teams in FY22;
• In July 2021, we gained feedback from the UK Retail and
Head Office SD Voice groups after 15 months in their roles, to
review progress and to identify what could be improved:
– 65% of SD Voice members believed that the SD Voice
reflected Superdry values.
– 94% of SD Voice members wanted to continue their role
within the group.
Several themes emerged, including having more opportunities
for collaboration, providing feedback on business-wide
projects, and influencing strategic initiatives. Some areas for
improvement included ways of working, defining the agenda for
monthly meetings and the principles of the group. Feedback
sessions were held and the learnings will be applied to new US
and EU SD Voice groups in FY22.
• Throughout the Covid-19 pandemic we have done everything
we can to make sure our colleagues feel supported. This
includes:
– Where we have been able to (in the UK and certain
overseas territories2), ensured that those furloughed never
received less than 80% of their take home pay when
government assistance schemes did not allow for this;
– Allowing the rollover of annual leave that had not been
taken, due to the pressures of workload in Head Office;
– Privately funding lateral flow tests for Head Office
colleagues who needed to be on site during lockdown
periods; and
– Enhancing our sickness policies to ensure they
covered extended periods of absence due to Covid-19
quarantine rules.
• Despite recent challenges, colleagues have continued to
come together to help to support local charities and the NHS,
as part of the Grow Future Thinking programme, some
examples of which are set out below and in the Sustainability
section on page 40:
– In December 2020, we turned our Café at Head Office into
a production facility to provide hot meals to those in the
local area. Over this period we provided 4,000 hot meals to
individuals through a charity network which was funded on
behalf of Superdry and enabled by Superdry colleagues;
– In June 2021, led by the SD Voice, Superdry donated
£6,703 to a local charity that supports bereaved families,
Winston’s Wish, raised through an auction of donated
items; and
– Following a devastating fire at the home of one of our store
leaders in the USA, Superdry donated $7,500 through
GoFundMe, to help them to get their life back on track.
• We have focused on supporting the well-being of our
colleagues over the period of the pandemic, appreciating that
some of our furloughed and non-furloughed colleagues will
have struggled in different ways. We maintained and
extended our network of Superdry Mental Health
Ambassadors, growing a network of 21 trained ambassadors
to help provide first-line support to colleagues, and we aim to
develop more in future. We also produced educational
materials to help colleagues struggling with anything from
how to spend their time, to where to get help, all of which was
made available through our internal communication platform,
Workplace.
• Following on from the success of 2017, even though
disrupted, Superdry continues to be a partner of the Invictus
Games at The Hague, now scheduled for 2022. This includes
providing:
– UK Team Trials t-shirt;
– UK Team Announcement Kit and Team Games Kit;
– Netherlands Team Games Kit;
– USA Team Games Kit;
– Games Organisers – volunteers, officials and staff games
Kit;
– Invictus Games Foundation Kit; and
– Kit for the USA, Iraq and Afghanistan nations.
Superdry looks forward to continuing its relationship with
Invictus.
1. For international colleagues outside of the United Kingdom this was a
Phantom Cash Award.
2. Store leaders in the USA and Germany.
50
Superdry plc Annual Report 2021 Strategic Report → Our People
Diversity and Inclusion
At Superdry, we aim to create environments where individuality
and authenticity can thrive. In 2019, 86% of colleagues felt that
they were treated fairly, regardless of their diverse
backgrounds3.
93% of our colleagues feel included at
Superdry, regardless of who they are.
In Summer 2020, as part of our response to the ‘Black Lives
Matter’ campaign, Superdry engaged with and listened to
colleagues, obtaining more than 600 views and opinions on how
we should improve our diversity and inclusion culture. We
created an action plan from this and have made progress on
several of our diversity and inclusion commitments:
• Led by our Senior Women’s Forum, which launched in 2019,
we enhanced our UK family-friendly policies. We increased
maternity and adoption leave from 12 weeks’ full pay to 18
weeks’ full pay for colleagues with two or more years’ service
in the UK, and increased paternity leave from two weeks’ full
pay to four weeks’ full pay;
• We introduced a workplace nursery partnership for
colleagues at our Head Office in Cheltenham with Tinies
Nursery, to support working parents with quality and
affordable tax-efficient childcare, close to their place of work;
• Our Senior Women’s Forum has continued to meet every
month, raising the profile of female leadership and ensuring
that issues surrounding gender equality are being discussed
and acted upon;
Our gender pay gap
We have recently published our Gender Pay Gap
Report 2020.
Our published Gender Pay Gap Report:
Available at: corporate.superdry.com
We count this as one of many measures of our progress.
This year, on the snapshot date of 5 April 2020, a proportion
of our UK workforce had been furloughed, so in accordance
with relevant guidelines, they were excluded from the
Gender Pay Gap Report. As a result, the gender pay gap for
the Group was 35.9%. Since the number of colleagues
• Superdry signed up to the Diversity and Inclusion Charter,
launched by the British Retail Consortium in March 2021,
committing to actions around responsible people, data and
recruitment practices;
• In March 2021, a Diversity and Inclusion Group was launched,
made up of global colleagues, to support and influence the
global diversity strategy. The purpose of the group is to
ensure that ideas, opinions and thoughts are shared and
heard from all backgrounds and to put our colleagues at the
forefront of decision making. This group will be a central part
of ensuring diversity and inclusion remains at the top of
Superdry’s agenda;
• We launched a data survey to improve the data we collect
and analyse and to ensure that we are able to properly
monitor and report on changes;
• We updated our Diversity, Inclusion and Equality Policy in
2020, to include a zero-tolerance approach for any
behaviours that were contrary to our value of togetherness. In
addition, we continue to give full and fair consideration to
applications for employment by disabled people. In the event
of an employee becoming disabled, every effort would be
made to ensure that their employment with us continues and
that appropriate training and support is arranged; and
• We delivered a programme of unconscious bias training for
our managers and leaders to help ensure decisions were
being made free from factors that could lead to
discriminatory outcomes.
Greater diversity at our Head Office and in our stores will help
us to understand our customers and what matters to them.
furloughed during FY21 greatly distorted this number, we
have chosen to voluntarily report on our gender pay gap as if
none of our colleagues had been furloughed, as we believe
this is a more accurate picture and, therefore, a better
measure of our progress.
This alternative way of reporting indicates that if we
assumed our colleagues were not furloughed, our gender
pay gap would have continued to shrink by 3.3%, to 19.3%4
across the Group.
3. Taken from the 2019 Great Place To Work Report from a sample of
3,793 respondents.
4. Using the pay gap assuming no colleagues were furloughed, the legal
figure is 35.9%.
51
Superdry plc Annual Report 2021 Strategic Report → Our People
Gender and ethnicity diversity targets
Superdry has already committed to gender and ethnic
diversity targets for its Board. A gender diversity target of
33% female representation is in place. In FY21, the figure for
female representation was 29%. An ethnic diversity target of
at least one Director from a Black or Minority Ethnic
background is in place, and this target was met in FY21.
During FY21, we set three-year targets for gender and ethnic
diversity, reaching beyond our Board, to include our
Executive and Senior Leadership Teams.
Our three-year targets, commencing in April 2021, are set
out below.
The Executive Committee
On the ‘snapshot’ date of 24 April 2021, the Executive Committee comprised 11 individuals (CEO, COO, Retail Director, General
Counsel and Company Secretary, Chief Marketing Officer, Wholesale Director, Global Sourcing and Sustainability Director,
Group HR Director, Merchandising Director, Global Creative Director and Logistics and Business Transformation Director).
Gender target
Performance (24 April 2021)
A minimum of 33% of the Executive Committee to be female Male 73% Female 27%
Ethnicity target
Performance (24 April 2021)
A minimum of 14% of the Executive Committee to be from
Black, Asian or Minority Ethnic backgrounds
13% from Black, Asian or Minority Ethnic backgrounds
The Leadership Team
Our Leadership Team is defined as the Executive Committee and their direct reports, excluding administrative roles, and
excluding four contractor roles on the ‘snapshot’ date of 24 April 2021.
Gender target
Performance (24 April 2021)
A minimum of 50% of the Leadership Team to be female
Male 61% Female 39%
Ethnicity Target
Performance (24 April 2021)
A minimum of 14% of the Leadership Team to be from Black,
Asian or Minority Ethnic backgrounds
7.5% from Black, Asian or Minority Ethnic backgrounds
(27 individuals submitted data out of 61)
We will continue to report on our targets. In addition to this,
we have taken the following actions:
• Future Thinks – A bursary scheme to encourage
applications from individuals from ethnic minority
backgrounds into roles at Head Office;
• The establishment of a female senior leader mentor
programme to help support talented female
potential leaders;
• Introducing balanced shortlists into every management
hire across the business, to ensure opportunities are fair,
as well as diversity and inclusion training during the
hiring process;
• Building marketing partnerships to aid in the attraction of
diverse talent;
• Keeping the conversation around diversity topics live,
including hosting more frequent online panel discussions
on issues such as LGBT during Pride month; and
• The introduction and embedding of flexible working rules
to help widen the talent pool and to make working at
Superdry more accessible.
Survey result
63%
Colleagues who felt that Superdry’s approach to diversity
and inclusion was positive
52
Superdry plc Annual Report 2021 Strategic Report → Our People
Communication and feedback
In times of crisis, communication is important. This year has
been unlike any other in the history of Superdry, but we are
proud to report that we have made several changes and
improvements to our communications structure, to keep
colleagues engaged and informed and to provide support.
74% of colleagues felt that Superdry’s
communication during the Covid-19
pandemic was ‘good’.
We decided in FY21, following consultation with the SD
Voice, to review the annual SuperSay survey and to
introduce Pulse Surveys, focusing on real-time topics that
are important to the brand, colleagues and society. Since
August 2020, we have carried out four Pulse Surveys:
Diversity and Inclusion, Well-being, People and
Development, and Engagement and Culture. Participation
has consistently increased, with 485 responses from 15
countries; growing to 756 for the second survey, 1,130 for the
third, and 1,503 for the fourth. Here were some of the
key messages:
Diversity and Inclusion Pulse:
• 93% of participants positively responded to the statement,
“I feel I am included at Superdry regardless of who I am”.
• 89% of participants responded positively to the statement,
“I feel I am treated fairly at Superdry”.
• In 2019, 86% of colleagues felt they were treated fairly
regardless of their diverse backgrounds.
Well-being Pulse:
• 78% of participants agreed with the statement, “I can
deliver my role and my priorities successfully whilst
managing my work/life balance effectively”.
• 74% of participants said that the Company’s
communication during the Covid-19 pandemic was good.
• In 2019, 65% of colleagues felt they were encouraged to
balance their work and personal life.
Survey result
78%
Colleagues who felt that they could deliver their role and
priorities while managing their work/life balance
53
Superdry plc Annual Report 2021 Strategic Report → Our People
People and Development Pulse:
• 78% of colleagues have clear priorities agreed between
Other engagement tools have been used to keep colleagues
informed in FY21:
• The first SD Live event was launched in January 2021.
These virtual ‘town-hall’ sessions are streamed on
Workplace every six to eight weeks, providing colleagues
globally the opportunity to hear the latest business news
and updates from Executive members and project leaders.
As we revert to a more normal environment in FY22, we
will continue to hold these events;
• Online hubs available to all colleagues providing support
and information on topics such as mental health and
well-being on Workplace;
• Members of the Executive Team, such as the Retail
Director, HR Director and CEO, gave presentations on
Workplace to update colleagues in person; and
• Regular updates for colleagues on Workplace with
information around Covid-19 policy changes, health and
safety protocols and trading performance.
Talent
Recruiting and retaining talent continues to be an important
strategic objective for Superdry. Some of the actions
implemented to support our talent strategy include:
• Due to the closure of our Head Office in March 2020, and
in order to support well-being, we launched a new
employee talent platform, OpenBlend. This digital platform
encourages line managers to focus on fulfilment, well-
being, work priorities and actions. The tool is designed to
drive engagement and to align colleagues to our strategy,
whilst supporting our hybrid working framework;
• We have prepared for the transition back to work in a
post-Covid-19 world. There will be roles that will always
need a physical presence (such as in Retail and some
creative roles). In consultation with colleagues, we recently
released our ‘Hybrid Guide’, aiming to give colleagues
more flexibility in when, how, and where they work. This
enhances the trust and respect of our colleagues, asking
them to work with their manager and teams to strike the
right balance between what works well for them, and what
is right for the business. Superdry applies a ‘more in than
out’ approach, which means that when restrictions are
eased, we expect every colleague in Head Office to
connect with one another at some point in the week, as we
believe this is key to emotional health and to teamwork;
• Our approach to learning and development is evolving,
focusing on ‘rapid learning sessions’ with our Senior
Leadership Team, and moving to a ‘digital-first’ approach
to develop those identified as having future growth
potential, through our emerging talent programme;
themselves and their line manager.
• 80% of colleagues are clear on their departmental goals.
Survey result
78%
Colleagues who have clear priorities agreed between
themselves and their line manager
Engagement and Culture Pulse:
• 78% of colleagues are proud to work for Superdry.
• 60% of colleagues are fulfilled by their role at Superdry.
• 71% of colleagues agree that Superdry is a great place
to work.
The Pulse Surveys reinforced some positive beliefs about
Superdry’s unique culture, but they also provided challenge
and opportunities for change. These opportunities have
been built into action plans, shared with the SD Voice and
published openly. Actions included:
• Putting in place a nine-point diversity action plan;
• Evolving our talent framework to increase the focus on
well-being and encourage more frequent ‘1-2-1s’ between
line managers and their teams through a new digital
performance management platform;
• The creation of a ‘Blackout Hour’ during the pandemic to
help ensure colleagues take time away from online
meetings and work; and
• Agreeing to the launch of a new global digital learning
platform, which will be accessible to every colleague
in FY22.
We will be continuing Pulse Surveys in FY22, gaining
feedback on relevant topics and communicating the steps
and changes delivered as a consequence.
Workplace
We use Facebook Workplace as our principal internal
communications tool. All colleagues and the Board of
Directors have access to Workplace, on which a range of
Company information and resources are shared, for
example:
• Our latest social media campaigns
• Previews of new product and design
• Events, promotions, competitions
• Colleague health and well-being
• Training events
• Retail news and updates.
This tool helps the Board to monitor culture at Superdry.
54
Superdry plc Annual Report 2021 Strategic Report → Our People
• Superdry continues to hold regular reviews of talent, to
enable the succession planning process. In October 2020,
talent reviews were held for all middle to senior
management roles to ensure forward thinking in our
approach to the development and retention of our
future leaders; and
• As we cautiously start to return to our Head Office and
Retail spaces, we have worked to ensure colleagues are
familiar with our strategy, health and safety regulations, as
well as culture and communications. As FY22 progresses,
we are re-onboarding our colleagues confidently, driving
engagement and re-building our teams.
Conclusion
FY21 has been a year unlike any other. During this year, the
Board and Executive Team have taken decisions in relation
to our people that support Superdry’s evolved values and the
strategy, recognising that our colleagues are the people who
will make it happen.
55
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
How we manage our risks
We understand the need for an effective
system of risk management. To ensure
processes to identify and prioritise those risks
of greatest exposure to Superdry and that the
benefits of risk management can be achieved,
we have continued to embed the
enhancements made to risk management
practices last year.
These enhancements included changes to the composition
and focus of our Risk Committee, a new Risk Management
Policy, and research into both the global risk landscape and
risks specific to the retail sector.
The output of these activities culminated in a revised set
of principal risks and uncertainties (PRUs). These were
consolidated and further prioritised so that the ongoing
assessment of risk, through quarterly reviews with senior
management, the Executive Team and Audit Committee, is
focused on the most significant risks faced by Superdry,
and also ensures that emerging risks that could, for
example, impact the Group’s ability to continue as a going
concern are assessed.
Our PRUs have been assessed against the evolving
Group strategy and risk mitigation activities have been
prioritised accordingly.
Coronavirus
Throughout FY21, significant resource has been deployed in
mitigating the many risks associated with Covid-19, to
minimise the impact to the business.
The response to the virus has been overseen by our Covid-19
Incident Management Team (IMT), formed of members of
the Group’s Executive Team and Head of Internal Audit, Risk
and Business Continuity. The IMT has been responsible for
crisis and emergency management, incident management
and business continuity management. At the time of writing,
while we have seen restrictions easing, for example, the
reopening of non-essential retail across the countries in
which we operate, given the uncertainty, pace of change and
wide-ranging impact of Covid-19, the IMT continues to meet
regularly. The priority has been, and will continue to be, the
safeguarding of colleagues and customers whilst
maintaining delivery of business operations and taking
actions to protect the long-term financial position of
the Group.
In July 2020, PwC carried out an independent review of our
response to the pandemic across the following areas:
pre-pandemic planning, scenario planning and corporate
strategy, crisis management, business continuity
management, workforce safety, communications,
workplaces, third party/supply chain, technology and
restoration to a new business as usual.
Risk review process
Existing/
emerging risks
Risk Committee
evaluation
Executive
Committee review
and approval
Audit Committee
review and approval
Board review
and approval
01
02
• Top down risk
identification
• Deep dive into
significant risks
03
04
05
• Monitoring risks
• Review of Risk
• Setting risk appetite
• Principal risks and
Committee minutes
• Principal risks and
uncertainties
• Risk Management
Policy
• Global risk landscape
• Risk assessment
uncertainties
• Evaluation of
• Horizon scanning
• Review risk score
• Assessing risk
across the 1–5 year
time frame
• Independent risk
assessment
effectiveness of risk
management
• Management and
strategic risk review
56
Superdry plc Annual Report 2021 It is highly likely the pandemic will continue to adversely
impact the Group in FY22 and it is clear that Covid-19 has
impacted the risk profile of the business, including the
nature and severity of exposure faced, and this is reflected in
the individual PRUs described below.
While our stores have reopened, there remains a risk of
further government lockdowns caused by emerging variants
of Covid-19, which could impact non-essential stores like
ours and would be especially impactful during peak trading,
for example, the Christmas period. Our supply chain has
proven to be resilient throughout the pandemic but
continues to represent an ongoing risk, especially where
there are high transmission rates which could lead to the
closure of some of our factories, such as India, during
recent months.
We have seen lost store revenues being partially offset by
increased Ecommerce channel revenues, and we may see a
continued shift away from stores as a result of the virus
impacting consumer habits and preferences, despite
successful vaccination programmes. Additionally, Covid-19
has increased the probability of a sustained economic
recession, which would have a significant and adverse
impact on Superdry.
Strategic Report → How We Manage Our Risks
The review highlighted a number of areas of good practice
that enabled the business to react swiftly and effectively to
issues as they arose, with significant focus on ensuring the
health and safety of both colleagues and customers,
ensuring compliance with government requirements, and on
ensuring the financial sustainability of the business
throughout the crisis. Improvement areas related to being
more proactive in considering potential risks and
opportunities, so the business could plan and respond to
issues in advance of them arising, for example, further waves
of the virus and lockdowns. We have sought to implement
these recommendations through various activities. For
example, we have undertaken a number of Executive
planning exercises that considered the impacts and
leveraged the learnings so that we could react more quickly
and minimise the impact of future waves of the virus. These
included, but were not limited to, weekly cash flow
forecasting and covenant monitoring, the well-being of
colleagues and customers, and communication plans. These
will be reviewed on an ongoing basis in light of further
potential waves of the virus.
Further details and actions taken to preserve the long-term
financial position of Superdry can be found in the CFO
review on page 75 and the impact on the wider business to
date can be found on page 20 as part of the Covid-19 statement.
Further action taken to protect the well-being, health and
safety of our colleagues and customers included:
The closure of all our stores at various times in FY21 as a
result of local government advice. During periods when our
stores have been permitted to open, we have conducted an
ongoing programme of ‘Covid Secure’ audits, to provide
assurance that social distancing and hygiene protocols are
being observed and that we are operating in environments
where we can safeguard our colleagues and customers. We
have also ensured that independent auditing has been
undertaken across our factory base and distribution network.
A small number of colleagues continued to work from Head
Office during FY21 because they were unable to perform
their roles remotely. To support these colleagues, we made
the decision to provide regular on-site Covid-19 testing,
administered by a qualified nurse. All colleagues attending
Head Office are required to complete a declaration to
confirm they have read, understood and will adhere to the
Covid-19 measures introduced. We have offered testing kits
to our retail colleagues where possible.
57
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Risk category: Brand
Damage may occur to the Superdry
brand or the brand may lose
its resonance.
The deterioration of the Superdry brand is a ‘risk theme’
that underpins many of the principal risks and
uncertainties identified by management – both in terms
of cause and effect.
For example: diminishing brand health caused by the
failure to meet consumer needs, poor quality or
counterfeit product, a failure to inspire consumers
through aspirational and relevant content and loss of/
unauthorised access to customer data.
Associated effects include customer perception,
investor sentiment, recruitment and retention of
colleagues, revenue and margin detriment (across all
channels), and financial penalties. As such, brand is
identified as a significant risk that impacts
multiple areas.
Specific mitigating activities are considered within
individual risk areas below.
Risk category: Operational
Design and Product: Superdry’s
ability to achieve success depends
on setting a consumer centric and
relevant commercial product
strategy that is aligned to brand
position, market dynamics and
consumer perception. A key element
of shaping consumer perception is
through presenting best expressions
of the brand in every retail channel,
which has been difficult during the
pandemic, with stores closed for
significant periods and consumer
mobility compromised.
A poor product strategy will prevent
us addressing consumer needs and
trends, leading to a product range
that is insufficiently differentiated or
unattractive to target consumers,
and ultimately a deterioration of
the brand.
A Creative Centre that is aligned to one brand, four style
preferences and nine consumer groups, enabling the
targeting of specific consumer segments. The
groundwork set over the last 18 months has created our
ability to have ‘hyper‑segmented’ style conversations
with consumers.
Product: The Group’s brand and product strategy, based
on insight driven ranges and collections, continues to be
embedded across the business, supported by our Brand
and Channel Marketing teams. We have sought to align
our product offering with consumer sentiment, targeting
core markets initially. Enhancing our short‑order
capability has enabled us to respond to consumer
demands, increase product choice online, and test
products more effectively.
Design: The CEO and Creative Director continually
review the design, selection and performance of product
ranges and trends to assess and correct any key
selection or product issues.
Key
No change
Increased risk
Decreased risk
58
Significant progress has been
made to deliver the brand reset.
The Group has developed its
strategy to adapt to a new
marketplace which has seen
uncertainty in the trading
environment, competitors exit,
and increased levels of
environmental and
social awareness.
Focus has also been on
connecting with new
consumers with an accelerated
shift towards digital, and
engaging with new
brand ambassadors.
While it will take time to rebuild
and optimise the brand, early
indicators such as customer
perception and investor
sentiment are positive. As such,
we believe the risk to have
decreased since last year.
Significant progress has been
made with the Group’s revised
product strategy underpinning
the AW20 brand reset.
We still believe the risk to be of
significance, as it will take time
to deliver collection objectives
and change consumer
perception. One of the key
pillars of our new strategy is to
‘Inspire through Product &
Style’, which will ensure
continued focus. However, the
ability to drive success as a
result of our new product is
subject to the retail and wider
economic climate we are
operating in. We believe the risk
has reduced from prior year.
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Risk category: Operational
Significant business interruption:
Compromise to our key
technological/physical assets would
significantly impede our ability to
trade, particularly during the peak
trading period from November to
January. The Group also remains
exposed to further waves of
Covid‑19 and associated lockdown
measures taken by governments,
including the enforced closure of
our stores.
Key assets include:
i. Ecommerce platform
ii. Distribution centres
iii. Critical IT
iv. Head Office
v. Large stores
Risk category: Operational
Stock levels: Elevated stock levels
represent a risk in terms of shortfall
in cash flow and additional
storage costs.
Trading volatility, such as that
caused by Covid‑19, may create an
excess of stock to clear that may be
brand damaging if continued
discounting and third party
clearance operators are
regularly used.
Development of business continuity measures to
improve capability in the event of significant interruption.
For example, understanding where the Company is most
exposed to interruption, the formation of an Incident
Management Team with relevant, cross‑departmental
representation and ongoing review of Incident
Management Plans.
Ongoing, real life deployment of business continuity
measures through the management of the Covid crisis
and programme of desktop exercises designed to test
responses to other significant business
interruption scenarios.
Implementation of recommendations from independent
review by PwC that assessed management’s response to
the Covid‑19 pandemic.
Resilience is also considered for our key physical/
technological assets.
For example, operating a series of multi‑channel
distribution centres capable of serving all channels in a
specific geographic region, with a common operating
system, provides built‑in resilience in the event of the
failure of a single distribution centre. We are also in the
process of bonding our warehouse at The Duke. The
Baron site was bonded during the financial year, allowing
us to both defer duty payments and avoid duty altogether
on exports.
Our current Ecommerce platform is hosted in a secure
cloud environment with performance testing of customer
peak loading, around the clock monitoring of key
interfaces, user experience and support team availability.
Our new Ecommerce platform will extend our resilience
capability by leveraging additional cloud security and
continuity functionality.
Robust, data driven ‘Open To Buy’ process with regular
meetings with a sub‑set of the Executive to determine
buy levels for each channel per season. This ensures that
buying decisions reflect the need to meet changing stock
levels across the estate. Stock reporting continues to be
a standing agenda item at Executive Committee
meetings and regularly communicated to the Board.
In the short term, to tackle trading volatility associated
with Covid‑19 and to reach year end target stock levels,
we rephased around 1 million units of the recent SS21
buy. We also continually review our supplier base to
reduce over‑reliance on individual suppliers.
We have revised our clearance strategy with a focus on
Ecommerce and physical outlet growth, whilst
maintaining our full price stance within stores. Our
contracted clearance partner has assisted in further
reducing stock levels during FY21.
59
The risk has various
components across different
asset types, which are often
interlinked. The development,
communication and
deployment of scalable and
adaptable business continuity
measures has demonstrated
the Group can effectively
respond to significant business
interruption incidents, not least
in response to the
Covid‑19 crisis.
While further waves of the virus
represent a risk in terms of our
ability to trade without
interruption, the likelihood and
impact when compared to last
year is considered to
have lessened.
Progress has been made in
terms of reducing year‑on‑year
stock levels from c.17m units to
c.15m units and responding to
trading volatility caused by
Covid‑19.
We believe the risk to remain at
similar levels to last year.
Enhancements to the
wholesale sales order process
to reduce returns, reshaping
the season’s buy to offer a
deeper volume of best‑selling
lines, automating
merchandising activity through
a new ERP system, and our
evolving clearance strategy, will
reduce this risk.
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Performance across our global, omni-channel proposition represents a risk. Specifically:
Retail store performance
Risk category: Operational
In line with market trends, the
ongoing consumer preference shift
towards digital shopping channels
has seen declining consumer visits
to stores and declining profitability in
the physical retail environment. This
trend has been accelerated by the
closure of the Superdry store estate
due to Covid‑19 during the multiple
lockdowns across many of our key
markets during FY21, leading to
significant revenue reduction
compared to prior year.
While open, we have had to make
changes to the number of customers
allowed in store, closure of fitting
rooms, introduction of sneeze
screens etc. all of which adversely
impacted performance.
Wholesale performance
Risk category: Operational
Wholesale performance is at risk
from a number of short‑term factors
relating to Covid‑19, which has
impacted the ability of our partners
to trade and contributed to surplus
stock levels where partners have
returned and cancelled orders.
Additional risks to performance
include brand perception, grey
market distribution (where product is
obtained from an unofficial
marketplace), and an inability to
deliver on time and in full
to customers.
As part of the Five‑Year Plan, a corresponding
five‑year retail strategy has been developed to
support the profitability of the store estate and
address any loss‑making stores. The strategy is based
on our five key markets of UK, France, Germany,
Netherlands and Belgium. Each store across our
entire store estate has been classified in a specific
category that will guide future action. For example:
re‑gear with a view to deliver significant rental savings,
exit the store, relocate or amend size of store.
We continue with our belief that a full price sales mix is
the right approach with a focus on driving conversion
rates for those customers coming to stores.
We have sought to be agile and be in a position to open
stores and trade safely as guided by local government.
Where other options exist, such as Fulfil From Store, we
have sought to trade wherever it is commercially viable to
do so.
During FY21, where leases have been renegotiated, we
continue to see significant savings.
We have sought to maximise the opportunity to sell to
Ecommerce partners (wholesale revenues comprise
c.70% sales through physical stores and c.30% through
online partners) through the pandemic. We have
maintained strong dialogue with partners to facilitate
payments and shipment of product.
A detailed action plan is being implemented to address
surplus wholesale stock, including a review of the
wholesale sales order process and our terms and
conditions for cancelled orders.
As a direct result of extended sourcing lead times,
forward order fulfilment delivery windows have been
rephased and extended to support seasonal sell through
for customers, resulting in proactive cancellations of
orders in some cases and the incentivisation to take
stock arriving later.
To reduce grey market distribution, we carry out
customer due diligence and conduct investigatory
measures where appropriate. The integration of RFID
has also served to reduce grey market risk, by being able
to identify the origin of the stock.
At the time of writing, while we
are fully open and trading from
a store perspective, uncertainty
remains in terms of further
lockdowns during FY22. We
also anticipate suppressed
footfall in our stores through
the first half of FY22 as a result
of uncertainty in consumer
confidence and the continued
shift to online. However, we
anticipate being able to recoup
a significant proportion of lost
store revenue from prior year in
FY22. As such, we believe the
risk to the business to be lower
when compared to prior year.
While the majority of our
wholesale store estate has
reopened, uncertainty remains
in terms of further lockdowns
during FY22.
By optimising the opportunity
to sell to Ecommerce partners
and addressing the issues
exacerbated by Covid‑19, we
believe the risk to be at similar
levels to last year. Our new
product continues to be
received very positively by our
customers, improving
brand perception.
60
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Ecommerce performance
Risk category: Operational/
Technology
Ecommerce performance
represents a significant growth
opportunity; however, it also
represents a risk in terms of delivery
of short/medium and long‑term
business objectives. We will be
unable to achieve these objectives if
the consumer is moving faster than
we can adapt and our Ecommerce
platforms are perceived to be behind
competitor propositions.
Consumers are drawn to
Ecommerce platforms that make the
experience of browsing, shopping,
discovering and ultimately
purchasing, engaging, efficient and
cost effective.
Risk category: Finance
Ineffective internal controls
There are a number of underlying
causes that have increased the risk
of significant control failure that
could lead to financial loss,
heightened risk of fraud and error,
increased audit fees, and prior
year adjustments.
While we have designed and
produced an Internal Control
Framework (ICF) to cover key
financial and non‑financial
processes, this is yet to be
fully embedded.
People: There has been a significant
turnover of Finance Team members
over the past few years, meaning a
lack of continuity.
Processes: Many current
transactional processes are manual
and result in significant requirements
for reconciliation, review and
analysis. This can cause, and has
caused, significant backlogs which
can cause difficulties in closing the
accounts in a timely manner.
Technology: Existing financial
systems are not set up to make best
use of functionality, or do not provide
the functionality required to enable
controls to be performed entirely
efficiently and effectively. This
increases the level of manual input
required and increases the risk
of errors.
We have made key hires to bolster the Ecommerce Team
during the year, including a new Chief Marketing Officer.
We have also hired specialist roles in areas to drive our
new strategic initiatives, such as social channels
and influencers.
Key to our digital strategy is the introduction of the new
Ecommerce platform, which will go live across our 21
websites in FY22. Accenture have been commissioned to
provide support, oversight and challenge to ensure we
optimise our chances of successful delivery.
The foundations are now in place to deliver the platform
which will enhance customer experience, respond to
changes in consumer trends, and enable continuous
innovation by facilitating quicker integration of
technologies to meet this demand.
We continue to build on brand marketing activity across
PR, social media and influencers.
We continue to invest in our
digital capability and have
recently recruited a Chief
Technology Officer, and
continue to refine team
structures and ways of working
to optimise performance when
the new technology
is implemented.
As such, we believe the risk to
have remained at a similar level
to last year.
The Group has sought to resolve the underlying issues
associated with an ineffective internal control
environment in the following areas:
People: Our permanent CFO joined in April 2021 and we
have finalised the recruitment of further roles across key
areas of the Finance function, including a new Group
Financial Controller who joined the team in March 2021.
Processes and Technology: With the support of an
Interim Finance Transformation Leader, we have sought
to understand and enhance upstream processes from
the Finance function that lead to backlogs, such as
optimising workflows. We have then prioritised the
clearance of these legacy backlogs.
We have started to introduce technology to automate
manual processes wherever possible, as well as review
and enhance current system configurations.
From a governance perspective, we have launched a new
Internal Control Questionnaire to improve management
oversight and provide assurance over the effective
operation of controls within the ICF on a regular basis.
Issues with controls are also reported and escalated on a
regular basis with management focus on root cause
and resolution.
The inclusion of ineffective
internal controls as a risk within
the Group’s PRUs for the first
time reflects the exposure
identified through various
external and internal audit
activity during the financial
year. While exposure remains,
the dedicated focus directed at
addressing underlying causes,
such as the clearance of a
significant proportion of
backlogs with the new people
on board, has seen recent
improvements that will continue
during FY22. Please see the
Audit Committee Report on
page 97, where control issues
are considered more fully.
61
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
The Group’s operations are geographically diversified,
introducing a partial natural currency hedge.
Our forecast foreign exchange exposures are hedged in
accordance with the Group’s approved Treasury Policy.
We have sought to streamline and simplify foreign
exchange activity with increased involvement of the CFO
in the management of foreign exchange exposure in
the year.
Oversight is managed through Audit Committee review
and a Treasury Committee, which considers foreign
exchange exposure and opportunities and uses forward
foreign exchange contracts to provide planning certainty
in the major currencies in which we trade. Board approval
is required if additional hedges are required that are over
and above existing Treasury Policy thresholds.
The Group’s Credit Risk Policy is designed to govern the
wholesale process, from the setting up of customers, for
example, review of the financial health of our wholesale
partners and obtaining credit insurance, through to timely
payment and management of debt. The Group’s bad
debt provision is reviewed on a monthly basis including a
review of the provision against the current
debtor position.
Since last year, despite being in
a better position to understand
our hedging position through
improved reporting and working
in line with an approved
Treasury Policy, we are
operating in a volatile (Covid‑19,
post‑Brexit) foreign
exchange market.
In addition, as a result of
Covid‑19, trading conditions
continue to be challenging for
our wholesale partners and
their ability to pay us. While our
bad debt risk remains elevated,
relative to pre‑Covid‑19 levels,
an element of the provision has
been released in FY21,
recognising the improving
outlook when compared to
FY20. As such, we believe the
risk to be similar to prior year.
Risk category: Finance
Exchange rates and bad debt
Our financial results could be
impacted by changes in
exchange rates.
The majority of our stock purchases
are made using foreign currency
(US$ or €) and, therefore, our costs
are exposed to foreign exchange
movements. This is partially offset
by a proportion of sales receipts
being in foreign currencies. At a
macro level, it is expected that the
impact of Covid‑19 and a post‑Brexit
environment will lead to exchange
rate fluctuations in the short to
medium term, creating uncertainty
around GBP profit and
cash equivalents.
Bad debt: Almost 40% of Group
revenue is from our wholesale
channel, made up of over 2,000
individual accounts. The risk of one
or more of these accounts being
unable to pay debt represents a bad
debt risk. Covid‑19 continues to put
pressure on our partners’ ability to
repay debt, with the aftermath of
Covid‑19 likely to last for some time.
62
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Significant liquidity is provided by an Asset Backed
Lending (ABL) facility (up to £70m), agreed in August
2020, and an overdraft (£10m) being sufficient to meet
our cash requirements in the short term.
Cash management has been very closely managed and
scrutinised throughout the pandemic, with a more
detailed cash flow forecast enhancing our ability to
effectively manage our cash position as well as managing
the ABL facility. The Board continues to monitor
headroom between forecast cash positions and facilities
including Earnings Before Interest, Taxes, Depreciation
and Amortisation (EBITDA) and net debt under multiple
stress test scenarios. Despite the pandemic, the Group
has not needed to draw down on the facility throughout
FY21, maintaining a net positive cash balance throughout
the year.
Key operating teams across stock purchasing and
property have focused on phasing and payment terms
for our largest outflows, for example, renegotiation of
leases with dedicated resource optimising relief and
deferral opportunity. We have also managed our payroll
extremely closely. For example, for three months, our
Executive Team took a temporary pay cut of 20% and our
CEO and the Board took a cut of 25% for six months.
The Group has sought to utilise government assistance,
such as job retention schemes, where available in the
territories in which we operate, supported by third parties
across tax and employment legislation.
The Group has maintained
healthy cash balances, despite
the significant impact of
Covid‑19, and renegotiated
facilities will provide the Group
with additional funding and
headroom. A recovery towards
normal trading dynamics, most
notably through sustained
periods of trading in our store
estate, will reduce the need for
cash preservation measures
required to mitigate
liquidity risks.
However, as a consequence of
some of the deferred payments
from cash preservation
activities in FY21, particularly
rent (c. £40m), amounts will
need to be unwound through
FY22, though management
plans to further reduce
structural stock holdings,
offsetting much of this working
capital impact. As such, we
believe the risk to be in line with
previous year.
Risk category: Finance
Cash management
For significant parts of FY21 we have
seen widespread closure of our
stores as a result of Covid‑19,
removing a key cash generating
channel from the Group’s trading
capabilities. In addition, given the
cyclical nature of the Group’s
revenue and expenditure, there are
points within the year when there are
significant outflows of cash, for
example, payments in September for
Black Friday and Christmas stock –
the timing of which can change.
Significant cash inflows, for example,
peak trading, do not align with the
timing of the peak outflows of cash.
As such, there is a requirement to
manage working capital within the
business to ensure we have
sufficient cash at all times to meet
our payment obligations, receive
stock on time and, therefore, fulfil
orders and ensure compliance with
our borrowing obligations. This is
also important in terms of
maintaining relationships with
suppliers and therefore, protecting
our payment terms.
Historically, the Group has had
significant cash reserves. However,
with recent trading, for example, as a
result of Covid‑19, pressure on the
cash balance has increased resulting
in the need for closer
cash management.
63
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Risk category: Talent
Recruit, develop and retain
quality leaders including key
man risk
We need to recruit, develop and
retain the calibre of leadership that
will enable us to achieve our
strategic goals. Failure to do so
could limit our opportunities for
growth and increase costs of
recruitment and retention. Equally,
we need to ensure that our talent
and leadership pool is reflective of
our new strategy, for example,
accelerated shift towards digital and
hitting our new diversity targets,
meaning that Superdry is more
frequently considering applications
outside of the local area
of Cheltenham.
The full impact of Covid‑19 on
recruitment and retention is yet to be
seen. However, there is clearly
increased demand for flexibility from
candidates and more consideration
across a range of factors such as
brand strength, financial stability
and sustainability.
Julian returned to the business as
Interim CEO in April 2019 with the
appointment being made permanent
in the current financial year. Julian is
core to the operation of the business
and his death, disability or absence
could have a significant adverse
impact to the business. Since this
appointment there have been a
number of changes to the
Executive Team.
Risk category: Strategy
Ineffective strategy
If the wrong strategy is developed, or
the strategy is not implemented
effectively, this could significantly
impact the success of the business
and erode corporate and
investor sentiment.
We have recently hired key Board and Executive roles
including a new Chair, Chief Financial Officer, Chief
Operating Officer and Chief Technology Officer.
The Nomination and Remuneration Committees assist
the Board in ensuring that the Board and Executive
Committee retain an appropriate structure, size and
balance of skills to support Superdry’s strategic
objectives and values.
We continue to work with select third parties to ensure
access to the right calibre of candidates.
Restricted shares were awarded to c.550 Superdry
colleagues in October 2020, focusing on the retention of
key senior talent.
A relaunch of the Employee Value Proposition has been
undertaken, with a refresh of Group values and making
positive changes in how to partner with colleagues to
increase the strength of the employer brand and drive
engagement within the business.
A new approach to talent management, including the
performance review process, was launched during the
year to develop leaders of the future and promoting from
within the business wherever possible.
Adjustments, such as flexible working arrangements,
have also been made to modernise working practices in a
post Covid‑19 environment.
Succession plans have been developed to ensure the
business has leadership and decision‑making ability in
the short term if something untoward happened
to Julian.
Significant work has been undertaken to define
Superdry’s future strategy, with workshops and updates
frequently shared with the Board.
This included a detailed five‑year business plan to
manage the business in the longer term. Central to this is
a financially disciplined approach to forecasting,
budgeting and control of costs, to return the Group to
profitability, and maintain a strong cash position.
We have previously engaged with a third party (PwC), to
support with key elements of the strategy to ensure
robustness of the strategic analysis undertaken and
credibility of the plan.
A new role, Strategy Director, has been created to deliver
our Five‑Year Plan. A structure to execute delivery has
been developed and includes the identification of 11
strategic initiatives with defined accountabilities,
governance and reporting that includes strategic KPIs.
64
With recruitment for the Board
complete and hiring Executive
roles nearing completion, we
anticipate a strengthened
alignment to strategic direction,
an understanding of the brand
and key operating principles.
While there remains some job
uncertainty in the marketplace,
not least as a result of Covid‑19,
we believe our evolving
resourcing model means we are
well positioned to deliver the
Group’s new strategy. As such,
we believe the risk to have
reduced in the year.
Having developed the core
components of the strategy,
where we have demonstrated
good progress in a number of
areas, we believe the risk to
have reduced since last year.
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Despite losses continuing in the
USA in the year, a number of
specific actions, mainly relating
to retail, will reduce our
exposure in this market.
However, we believe the risk to
remain at an elevated level,
similar to last year.
The inclusion of environmental
risk to our PRUs for the first
time reflects the increased
exposure and regulatory
attention in this area. While
scrutiny is increasing, we
believe we are well placed to
mitigate associated risks
through the emphasis we
are placing on our
environmental credentials.
Contractual negotiations with logistics partners are
complete, and we have integrated our multi‑site
operation into a single site operation at The Eagle,
reducing US logistics costs.
Payroll savings have been implemented in the US during
the year, and a property strategy has been developed to
address elements of the store estate that drive the
largest proportion of losses.
‘Lead through Sustainability’ is one of the key pillars of
our new strategy. The Group has set milestones so that
we can meet our 2025 and 2030 sustainability goals and
progress is tracked against key environmental initiatives
such as packaging, emissions and compliance with wider
environmental regulation.
Our sustainability goals are in line with established
material impacts for a fashion brand and align with the
United Nations Sustainable Development Goals (SDGs).
We currently use a number of reporting, certification,
verification and assurance mechanisms to understand,
calculate, manage and publish our impacts. These
include the Carbon Disclosure Project (CDP), global
carbon emissions calculated to global standard (GHG
Protocol) which is independently verified by AVIECO.
Moving forward, we will also align to regulatory
requirements such as the Task Force on Climate‑related
Financial Disclosures (TCFD).
We recently topped the list of the Financial Times
‘Europe’s Climate Leaders 2021’, recognising the
improvements to reduce our CO₂ emissions.
Our low impact materials goals seek to address
longer‑term risks such as raw material availability and
shifting consumer preferences.
Risk category: Strategy/
Operational
Key markets
Failure to deliver on our growth
aspirations in the Group’s key future
development markets, in particular
the USA, could lead to investment
without sufficient return in a
reasonable timeframe and/or losses
and the deployment of significant
management resource at a time
when we have multiple priorities.
Risk category: Strategy
Environmental
Awareness of environmental
sustainability is increasing, and
stakeholder expectations and
regulatory attention are also
developing at pace. Failure to meet
expectations or adhere to regulatory
standards would adversely impact
our brand. A consequence of
enhanced reporting is additional
resource requirements.
These factors also represent a risk in
that they could influence the rate the
business may need to cut its carbon
emissions and add additional cost to
achieve environmental compliance
(for example, raw materials and
lower emission technologies).
In addition, the Group is heavily
reliant on key raw materials which
will be impacted by the effects of
climate change in the long term
making them harder and more
expensive to source.
A longer‑term risk is shifting
customer preferences as result of
climate change, requiring the brand
to adapt further.
65
Superdry plc Annual Report 2021 Strategic Report → How We Manage Our Risks
Risk
Mitigation
Movement in the year
Risk category: Compliance/
Technology
Information security and threat
of data privacy breach
There is a risk our information
security is breached, causing data
and/or systems compromise. This
could lead to fraud, impact our ability
to trade, regulatory scrutiny,
litigation or fines, and cause damage
to the brand.
The cyber threat landscape has seen
an increase in organised crime
groups using Covid‑19 to carry out
targeted campaigns against a
number of organisations, including
our own.
We have a Data Protection and Information Security
Steering Group which meets regularly. It is a cross‑
functional group which reviews and checks the proactive
steps our business takes in managing the risks around
data privacy and information security.
With regard to data privacy, we have devised and
launched a new consumer‑facing Privacy Policy and
review technical and organisational risk management
strategies. The group also monitors internal education
and communications to promote a culture of compliance.
With respect to information security, the Steering Group
helps to monitor the threat landscape and works to
embed key policies and controls. We continue to
enhance controls associated with the National Cyber
Security Centre’s guidance, including: managing user
privileges, incident management, monitoring, home and
mobile working, secure configuration, removable media
controls, malware prevention, user education and
awareness, and network security.
We continue to enhance our capability by further
investment in dedicated information security resource to
complete a road map associated with an external,
independent review of our cyber capability and
maturity assessment.
Risk events associated with information security and
data protection are reviewed during the year by both the
Risk Committee and the Audit Committee, promoting a
programme of continuous improvement.
Risk category: Compliance
Ethical (human rights)
Failure by suppliers to adhere to our
Ethical Trading Code of Practice
could erode our reputation as a
responsible brand.
Customer enquiries on ethical
trading continue to increase,
awareness is also growing in line
with the modern slavery and the fast
fashion debate, and failure to
demonstrate our credentials in this
area could also lead to
reputational damage.
Increased risk of human rights issues
through the supply chain, as a result
of changing local conditions, for
example, Covid‑19.
We have a dedicated team responsible for ethical
sourcing matters, and dedicated local experts in our key
markets to detect and mitigate risks associated with
changing market conditions. The Group is a member of
the Ethical Trading Initiative, which seeks to improve the
lives of workers worldwide. We engage with our suppliers
and expect them to operate in accordance with our
Ethical Trading Code of Practice, which is available at
corporate.superdry.com.
We assess the status of operating practices through a
schedule of audits and visits and, where necessary, work
with suppliers on improvement plans.
In April 2021, we won the inaugural Positive Change
Award as part of the Drapers Sustainable Fashion
Awards, which recognised our concerted efforts to
improve our operations as well as our new
environmental initiatives.
The Audit Committee receives regular reporting on
compliance with our Ethical Trading Code of Practice.
Actions taken in the year have
enhanced our understanding of
the risk profile, and investments
in people and systems are
designed to protect us to within
our risk appetite.
The Steering Group provides a
level of assurance over our
exposure to a breach of data
privacy – particularly in terms of
our internal processes
and culture.
While we continue to improve
our internal technical and
organisational controls to
reduce risk, the current climate
continues to see a trend
towards cyber‑attacks
becoming more prevalent and
sophisticated. There is a
heightened risk when
compared to that seen 12
months ago in this area.
The inclusion of ethical risk to
our PRUs for the first time
reflects the increased
awareness of our
responsibilities as a leading
fashion brand alongside an
increase in scrutiny within our
own supply chain to drive
best practice.
66
Superdry plc Annual Report 2021 Strategic Report → Non-Financial Information Statement
Non-Financial Information Statement
Non-Financial Information Statement
The table below shows where information can be found in relation to the requirements of the Companies Act 2006 section
414CA and 414CB, including information on policies and policy outcomes (where applicable):
Reporting requirement
Annual Report section(s)
Page
number
Related policies/standards
Review of the business
CEO Review and CFO Review
23, 75
–
Principal risks and
uncertainties
The main trends and factors
likely to affect the future
development, performance
and position of the business
Business model
Environmental matters,
including the impact of the
business on the environment
How We Manage Our Risks
56
• Risk Management Policy and Framework
CFO Review, How We
Manage Our Risks, Viability
Statement
75, 56, 83
–
Strategic Report – business
model section
16
–
Sustainability Report
40
• Our Mission
• Environment Policy
• Sustainable Development Goals (SDGs)
• REACH Standards (chemical compliance)
• CDP (climate change disclosure)
Social and Community
matters
Sustainability Report, Section
172 Statement
40, 68
• Grow Future Thinking initiative
Employees
Sustainability Report, Our
People
40, 48
Respect for Human Rights
Sustainability Report
40
• Code of Conduct
• Health and Safety Policy
• Whistleblowing Policy
• Diversity, Inclusion and Equality Policy
• Flexible Working Policy
• Education and Professional
Qualifications Policy
• Maternity, Paternity and Shared Parental
Leave Policies
• Diversity, Inclusion and Equality Policy
• Ethical Trading Code of Practice
• Migrant Worker Policy
• Modern Slavery Statement and Policy
• Customer Privacy Policy
• Employee Privacy Notice
Anti-Bribery and Corruption
Directors’ Report
124
• Anti-Bribery and Corruption Policy
• Code of Conduct
Culture
Section 172 Statement and
Sustainability Report
68, 40
• The Superdry Playbook
• Our Values and Behaviours
• Code of Conduct
Non-Financial Key
Performance Indicators
Sustainability Report
40
67
Superdry plc Annual Report 2021 Strategic Report → Section 172 Statement
Section 172 Statement
In compliance with sections 172 and 414CZA (Companies
Act 2006), the Board makes the following statement in
relation to FY21.
The Board recognises that the medium and long-term
success of the Group, and its social licence to operate, is
linked to value creation for its stakeholders. Our stakeholders,
what matters to them and how engagement happens, are set
out in the table below.
Our purpose, culture and values and full details of our
employee engagement and feedback mechanisms can be
found in ‘Our People’, which starts on page 48.
Superdry strives to meet the highest standards of conduct
and has policies and procedures in place to support this goal
(for example – our Code of Conduct, Using Social Media
Policy, Anti-Bribery and Corruption Policy and training, and
our Modern Slavery Statement and Ethical Supplier Code of
Practice (both published at corporate.superdry.com)).
A Whistleblowing Policy is in place and an independently run
whistleblowing line operates for the reporting of unethical
behaviour (please turn to page 103 for more details of our
Whistleblowing arrangements).
Superdry aims, at all times, to act fairly as between its
members regardless of the size of their shareholding. Our
financial results, notices of meetings and a range of
information about Superdry are published at corporate.
superdry.com. Our AGM provides an opportunity for all
shareholders to meet with and ask questions of our Board
(subject to any Covid-19 related restrictions in place at the
time of the meeting). At this year’s AGM, shareholders will
be able to join a live webcast. We respond to queries and
requests for information from all shareholders on a prompt
basis, via company.secretary@superdry.com and investor.
relations@superdry.com.
Stakeholder engagement
What matters to them
Engagement mechanisms
How feedback reaches the Board
Shareholders
• Financial results
• Dividends and EPS
• Strategy
• Efficiency
• Remuneration
• Sustainability/ESG matters
• Corporate website
Consumers/Trade Customers
• Value for money
• Direct contact in stores
• Financial, sales, trading and footfall
• Accessibility of product
• Global Sales Meeting
• Garment quality and reliability
• Monitoring/reporting of sales,
• Design
• Customer service
• Store and website experiences
• Sustainability and ESG matters
• Annual General Meeting
• Investor Relations reports and
• Annual/interim results
• Consultation with investors and
voting advisory organisations
analysis at scheduled Board meetings
• Reports from corporate brokers
• Face-to-face meetings with investors
• In person at AGM and investor events
• Investor events/ roadshows
• Media
• Stock market news
• Liaison through corporate brokers
• Reports from investor
advisory agencies
• Media
• Company Secretary and Investor
Relations inboxes
footfall, website traffic and internet
search analyses
• Customer satisfaction surveys
reports / analysis and KPIs are
reported at scheduled Board
meetings
• Trading analysis and sales data is
also shared with the Board in a
weekly report
• Customer services direct contact
• Net Promoter Score as an internal KPI
• Social media and websites
• Previews of collections presented to
• Annual Report
• KPIs
the Board
• Strategy days
68
Superdry plc Annual Report 2021 Strategic Report → Section 172 Statement
What matters to them
Engagement mechanisms
How feedback reaches the Board
Colleagues (Employees)
• Employment
• Pay and benefits
• Job security
• Work/life balance
• Mental health
• Diversity and Inclusion
• Career opportunities
• Sustainability and ESG matters
• Health and safety
• SD Voice/Retail Voice meetings
• NED for workforce engagement
• Pulse Surveys
• Senior Women’s Forum
• Diversity and Inclusion Forum
attends SD Voice meetings
• People reports at scheduled
Board meetings
• Annual pay review and reports to the
• Workplace (internal communications
Remuneration Committee
platform)
• All staff events (Head Office)
• NED for workforce engagement –
please refer to ‘Our People’ on
page 48
• ‘Threads’ magazine for
store colleagues
• Sustainability Warriors
• A survey was undertaken in June
2021 to gauge the effectiveness of
the SD Voice. Further details of this
can be found in ‘Our People’ on
page 48
• Results of Pulse Surveys are shared
with the Board (four surveys to date)
• SD Voice reports and presentations
to the Board
• Diversity recruitment targets were
approved in FY21 (see ‘Our People’ on
page 48)
• Health and safety reports at
scheduled Board meetings
Environment
• The impact of the Group’s operations
• Sustainable Development Goals
• Sustainability reports and
on the environment e.g., CO2
emissions, use of plastic packaging,
organic cotton production,
sustainable farming practices
presentations at Board and
Committee meetings
• Supply chain reports and ‘deep dives’
• Sustainability news on Workplace
• Sustainable stories on our website
• Social media
• Engagement with organic cotton
farmers – please refer to the
Sustainability Performance report and
targets on page 40 and to the
Sustainability Report at corporate.
superdry.com
• Awards/recognition of our work
Community/Wider Society
• Corporate governance
• ‘Family and friends’ events at Head
• CEO reports at scheduled Board
• Health and safety
• Employment and conditions
• Charitable donations
• Sponsorship
• Sustainability
Office
meetings
• College placements and
work experience
• Social media and websites
• Volunteering in the community
• Support for local charities
• Invictus Games support
• Board briefings from public
relations advisers
• Health and safety reports at
scheduled Board meetings
• Sustainable stories on our
corporate website
69
Superdry plc Annual Report 2021 Strategic Report → Section 172 Statement
What matters to them
Engagement mechanisms
How feedback reaches the Board
Suppliers
For example contractors, banking partners and landlords
• Payment terms
• Supplier conferences
• Fair contractual arrangements
• Face-to-face meetings and visits
• Communication
• Success of Superdry
• Anti-bribery and corruption
• Ethical behaviour
• Corporate governance
• Sustainability
Media
• Day-to-day contact between
colleagues and suppliers
• Modern Slavery Statement
• Superdry Supply Chain Ethical
Trading page of corporate website
and Ethical Trading Code of Practice
• Respect and Dignity programme
• Reports and stories
• News releases/stories
• Regular communication
• Stock market announcements
• Sustainability
• Interviews
• Visits and meetings
• Social media
• Websites
Government/Regulators
• Compliance with law and best
• Meetings/briefings
practice
• Corporate governance
• Health and safety
• Modern slavery
• Data security
• Consultations
• Dialogue with trade bodies
• Specialist advisers
• Interactions with tax authorities
• Operational updates in CEO report to
the Board at scheduled meetings
• Supply chain ‘deep-dives’ at
scheduled Board meetings
• Risk Committee updates
• Ethical audits and reports to the Audit
Committee
• Reports are circulated from our
communications advisers
• Analysis of investor sentiment is
reported in Investor Relations reports
at scheduled Board meetings and as
necessary
• Social media
• Legal, Governance and Risk reports
at scheduled Board and Committee
meetings
• ‘Deep dives’ on areas of risk as they
arise (e.g., in FY21 on ethical supply
chain and auditing)
Principal decisions
The Board considers its principal decisions
to be those that have significant long-term
implications for the Group and its stakeholders.
At its scheduled Board meetings, agenda items
that are likely to have a long-term impact on
stakeholders are highlighted. Templates for
Board papers include a ‘stakeholder’ section to
highlight the likely impacts for investors and
wider groups, and to ensure that stakeholders
are considered as part of the Board’s decision-
making process.
The principal decisions taken by the Board in FY21 were:
• Continued Covid-19 pandemic response
• Board and Executive Committee appointments (several
during FY21, please see below)
• Approval of an Asset Backed Lending Agreement
(August 2020)
• Approval of a new Board Diversity and Inclusion Policy
(October 2020) and diversity targets for recruitment
(March 2021)
• Approval of a sustainability initiative – ‘Grow Future
Thinking’ (November 2020)
• Approval of the new Strategy, Five-Year Plan and FY22
Budget (April 2021)
Further consideration of four of the principal decisions taken
in FY21 follows, to demonstrate the ways in which the Board
had regards to the matters set out in Companies Act section
172(1) (a) to (f).
Please note that in respect of dividend policy, no dividend
has been approved or recommended by the Board since
December 2019 and no dividend is recommended in respect
of FY21. For information about capital allocation, please refer
to the CFO Review on page 75.
70
Superdry plc Annual Report 2021 Strategic Report → Section 172 Statement
Principal decisions, how stakeholders were considered by the Board, linkages to strategy and
outcomes for stakeholders
pandemic, with remote arrangements becoming routine for
many colleagues and appropriate support needing to be put
in place, for example, the provision of suitable office style
chairs and headphones. Furlough schemes have been
applied to store and Head Office colleagues, wherever
government assistance has been offered, to protect jobs and
the long-term interests of the Group.
In the Autumn of 2019, Superdry embarked on an ambitious
reset of the brand, which has been slowed down by the
pandemic. A new strategy was developed over the course of
FY21 and it has been important for the Board to ensure that
the Group is able to implement that strategy as conditions
return to normal.
Linking stakeholder consideration to strategy
The Board considered stakeholder impact and feedback
alongside Superdry’s purpose and mission (see page 15) and
supported activity that would achieve its short-term
strategic objectives in a ‘Covid’ environment, whilst
prioritising the needs of colleagues, customers, suppliers
and communities. An Incident Management Team
implemented the global Covid-19 response from Head Office
and the Board monitored activity by way of additional remote
Board calls and regular updates.
Outcomes for stakeholders
The Executive Committee’s Covid-19 mitigation
strategies and activities, supported by the Board, created
the following outcomes for stakeholders:
• Preventing the spread of disease
• Early detection of disease through testing, helping to
keep our workforce healthy
• Mental health support during and after the lockdowns
• Job preservation
• Our stores were able to re-open when lockdowns
ceased and conditions allowed, offering customers
product and choice in a safe environment
• We accelerated reviews of our online platforms to
improve their quality
• Contracts with suppliers were safeguarded
• Our ability to operate has allowed us to continue to
achieve our Sustainable Development Goals, with
positive impacts on the environment and on our
communities, e.g., recyclable packaging, organic cotton
targets
• Learning and development for colleagues can continue,
increasing the skills of our workforce
Decision:
Continued response to the Covid-19
global pandemic
Context:
Maintaining our operations as far as possible and
as safely as possible, in the face of global
lockdowns, health and safety concerns, store
and Head Office closures and pressure on supply
chains. Implementing a range of measures to
mitigate the global impact of the pandemic.
“Our team has responded incredibly
well and above all we’ve been focused
on looking after our colleagues and
customers and ensuring everyone is
keeping safe.”
Julian Dunkerton
For a detailed explanation and analysis of our complete
response to Covid-19 please refer to page 20. The following
section considers some, but not all, of the impacts on
stakeholders, to provide examples of the Section 172 matters
considered by the Board.
How the Board considered our stakeholders
The Board and Executive Committee’s chief concerns were
for the health and safety of stakeholders including
community, colleagues, customers and suppliers. It was
necessary to balance the performance of the Group against
health and safety considerations and the restrictions put in
place by government and regulators worldwide. The Board
also considered the need to avoid social or economic
hardship for any stakeholder in the context of needing to
ensure the stability of the Group, and that staffing structures
would be in place for a ‘post-Covid world’. Appropriate
Covid-19 health and safety measures were applied to all
workplaces to protect our colleagues, including rapid testing
and contagion tracing at Head Office. Mental health support
was increased to all colleagues, including a dedicated Pulse
Survey on health and well-being and the implementation of a
‘blackout hour’ at Head Office, from 12.00noon to 1.00pm
each day, to ensure colleagues were taking adequate breaks.
Working arrangements changed during the Covid-19
71
Superdry plc Annual Report 2021 Strategic Report → Section 172 Statement
‘Principal decisions’ continued
Decision:
Board and Executive Committee
appointments
Context:
Several new Board and Executive Committee
appointments were made in FY21. Julian
Dunkerton was appointed permanent CEO in
December 2020. In April 2021, Peter Sjölander
was appointed Chair of the Board and Shaun
Wills was appointed as an Executive Director
and CFO. Executive Committee appointments
were also made during the year: Justin Lodge
was appointed Chief Marketing Officer and
Silvana Bonello was appointed Chief
Operating Officer.
“The Board, Julian and the Executive
Team have a clear vision for the
business and have made a great start
on the reset. I am really looking
forward to working with everyone to
restore Superdry to its rightful position
as a leading global brand.”
Peter Sjölander
For biographical details of our Board, please refer to page 84
and for biographical details of our Executive Committee,
please refer to corporate.superdry.com.
How the Board considered our stakeholders
Each appointment was made by the Board with the interests
of all stakeholders and the long-term sustainable success of
Superdry in mind, as the Board put in place a leadership team
that had the right blend of skills to implement the developing
strategy. Peter Sjölander brought further digital,
transformational and turnaround experience to the Board, and
Silvana Bonello brought significant international and
operational brand experience. Justin Lodge’s digital and
social media marketing background was important to the
Group’s digital strategic objectives. Shaun Wills’ significant
financial retail experience, combined with his knowledge of
the Group’s operations and of Superdry, made him the right
choice for CFO. The Board also had regards to the interests
of colleagues when considering these appointments, as the
long-term success of the Group is dependent on putting the
right leadership in place: creating job security in the short
term and career progression opportunities and financial
opportunities in the medium to long term. Suppliers would
also be positively impacted by the Group’s improved
financial performance in the form of continued business
and better payment terms. Consumers/trade customers
are positively impacted by improved performance, in the
form of investment in stores and improved product ranges.
The turnaround of the Group and improved business
performance are important to investors.
Linking stakeholder consideration to strategy
The appointments made allowed the Board to continue to
implement the strategy, particularly our digital and
sustainability ambitions – for full details of our strategy please
refer to page 26.
Outcomes for stakeholders
The implementation of our strategy is anticipated to yield
a range of positive outcomes for all stakeholders:
• Increasing our social and digital engagement and user
experiences, such as an improved website with
increased functionality
• Operational efficiencies, potentially contributing to
increased profit margins
• The successful reset of Superdry will lead to increased
job security for colleagues
• The achievement of our sustainability goals will
positively impact the environment
• The local community around our Cheltenham Head
Office is positively impacted by Superdry’s continued
operations. In our stores, jobs are secured, and skills
are developed in workforces around the globe
“We now have the right operational
leadership to steer the business through
these most uncertain times and drive
the brand reset as we seek to inspire our
customers with design-led, sustainable
product and engage with them through
our digital channels.”
Julian Dunkerton
72
Superdry plc Annual Report 2021 Strategic Report → Section 172 Statement
‘Principal decisions’ continued
Decision:
Board Diversity and Inclusion Policy and
diversity recruitment targets
Context:
A new Board Diversity and Inclusion Policy
was put in place and the Board approved the
setting of recruitment targets for diversity.
“The tone for diversity and inclusion
across the organisation is set from the
top and the Board believes that having
a diverse leadership team and an open
and inclusive culture form part of
Superdry’s core values.”
Board Diversity and Inclusion Statement
The Board approved a new Diversity and Inclusion
Policy in October 2020 and approved the setting of
recruitment targets for ethnic and gender diversity at
Executive Committee and senior leadership level in
March 2021. Please refer to ‘Our People’ on page 48 for
more information.
How the Board considered our stakeholders
Diversity and inclusion have always been important to
Superdry, and gender and ethnic diversity targets are
already in place for the Board. The ‘Black Lives Matter’
campaign that began in the Summer of 2020 and
subsequent feedback from social media and from
colleagues, caused the Board to ask if Superdry was doing
enough to promote diversity and inclusion, particularly with
respect to ethnic diversity. A dedicated Pulse Survey was
issued to colleagues to gauge opinion on diversity and
inclusion, and a dedicated diversity focus group was
established to discuss diversity and inclusion at Superdry.
The Board also considered the views of customers and
public opinion on social media channels, and the media
coverage of the events that took place following the murder
of George Floyd. ‘Black Lives Matter’ was discussed by the
Board at its meetings and strategy days throughout FY21
and has informed and influenced the sustainability pillar of
the developing strategy. Government and regulators have
also been considered – the recommendations of the Parker,
McGregor Smith and the Hampton Alexander reviews were
incorporated into the reports that were prepared by
management to support the consideration of the diversity
and inclusion strategy. Investors and investor advisory
agencies have also been considered as stewardship
becomes more focused on diversity and inclusion.
Linking stakeholder consideration to strategy
The new Board Diversity and Inclusion Policy is in place and
diversity recruitment targets for the Executive Committee
and Senior Leadership Team were agreed at the start of
FY22, with three-year goals for achieving greater ethnic and
gender diversity. For further information on the diversity of
our Board, please refer to page 88 and for more information
about our diversity recruitment targets, please refer to
page 52.
Outcomes for stakeholders
• Diversity at senior level at Superdry is targeted to
increase by 2025
• Greater diversity at leadership level will positively
impact the rest of our workforce, providing role models
and mentors to inspire colleagues and to increase
opportunities
• Greater diversity leads to better decision making and a
more sustainable future
• Our communities are also positively impacted by
increased diversity in our workforce, creating social and
economic opportunities for a greater number of people
73
Superdry plc Annual Report 2021 Strategic Report → Section 172 Statement
‘Principal decisions’ continued
Decision:
Approval of the new Strategy, Five-Year Plan
and FY22 Budget
Context:
During FY21, the Board and Executive
Committee held several strategy days,
in addition to focused meetings and
discussions, to develop the new strategy.
The Five-Year Plan and FY22 Budget will
support the implementation of the strategy.
“We took the opportunity to sharpen
our strategy this year despite the
challenges posed by the pandemic.”
Julian Dunkerton
Please refer to page 26 to read about our strategy and to
page 83 to find out more about our Five-Year Plan and the
FY22 Budget.
The Board and Executive Team considered that Superdry’s
stakeholders were adapting to a new marketplace in the
post-Covid world, consisting of an uncertain trading
environment, a shift towards local consumerism, an
accelerated switch to digital, increased environmental and
social awareness, combined with new working patterns and
environments. Three key consumers were identified within
this market and carefully considered – Generation Z, Fashion
Followers and Womenswear. Three broad strategic
objectives were developed to reach those consumers:
Inspire through Product & Style; Engage through Social; and
Lead through Sustainability.
How the Board considered our stakeholders
The Board and Executive Team considered colleagues in the
development of the strategy. The retention of colleagues,
the development and nurturing of talent from within our
existing teams to lead Superdry in the future, and increasing
our workforce diversity, were key considerations.
In creating the strategy, the Board and Executive Team have
also considered the long-term impact on our suppliers, who
depend on their contracts for their continued success. Our
digital enhancement strategies will produce further
opportunities for existing and new technology partners.
An important part of Lead through Sustainability is about
leading positive change for our supply chain. This includes
74
farmers, factories and factory workers, and colleagues.
Various social initiatives have been established to help
improve farming practices, working conditions and practices,
and to ensure fair pay in our supply chain.
In putting in place sustainability objectives, the Board has
considered the environment as a stakeholder group and that
the achievement of sustainability goals over time will
positively impact local and global environments.
When Julian Dunkerton returned to Superdry in 2019, his
intention was to reset the brand with the aim of restoring
Superdry as a leading global retailer. The careful
development of the strategy and ensuring that it will endure
in a post-Covid world, balancing short-term needs against
longer-term business risk as set out in our Covid-19
statement on page 20, is designed to eventually return the
Group to profitability, which will benefit investors and wider
stakeholders alike in the long term.
Linking stakeholder consideration to strategy
Please refer to page 26 to read more about our strategy.
Inspiring through Product & Style will be achieved by
providing outstanding value and product choice for our
consumers and by delivering inspiring brand experiences
– enhancing the overall consumer experience.
The foundation of our Lead through Sustainability strategic
pillar is the enhancement of our core systems and oversight
of information, leading to continuous improvement in our
internal controls and systems of governance.
Outcomes for stakeholders
• Returns on investment and earnings for our
shareholders
• Job and economic security for colleagues in the short
term and financial, career and development
opportunities in the longer term
• Our supply chain will be provided with support to
improve farming practices, working practices and
conditions, and ensure fair pay
• The achievement of our sustainability objectives will
have positive outcomes for the environment
• Suppliers will benefit from our continued operations,
with the possibility of increased orders and more
favourable terms
• The fulfilment of our digital ambitions will lead to
improved digital offerings and experiences, such as
Ecommerce sites with greater functionality
• Consumers will continue to enjoy well-designed, high
quality clothing and accessories and exceptional value
for money
• Enhanced core systems and processes will ensure high
standards of business conduct
Superdry plc Annual Report 2021 Strategic Report → CFO Review
CFO Review
Shaun Wills, Chief Financial Officer (CFO)
Group revenue decreased by 21%, largely driven by the forced closure of our store
estate as a result of Covid-19. Despite the significant number of store days lost this
year, the adjusted loss before tax reduced by 70%, with cost saving measures and
government support helping to offset trading shortfalls. Whilst significant uncertainty
remains, we expect a recovery in FY22.
“Despite the significant number of store days lost this
year, the adjusted loss before tax reduced by 70%, with
cost saving measures and government support helping
to offset trading shortfalls.”
Stores
Ecommerce
Wholesale
Stores
Ecommerce
Wholesale
Group profit or loss
Revenue:
Group revenue
Gross profit:
Group profit
Gross profit margin %
Selling and distribution costs
Central costs
Impairment credit/(losses) on
trade receivables
Adjusted other gains and losses**
Adjusted operating loss**
Adjusted operating margin**
Net finance (expense)
Adjusted loss before tax**
Adjusting items:
Unrealised (loss)/gain on financial derivatives
IFRS 2 charge – Founder Share Plan
Restructuring, strategic change and other costs
Intangibles asset impairment
Store asset impairment charges and reversals
and onerous property related contracts provision
Total adjusting items
Loss before tax
Tax (expense)/credit
Loss for the period
2021
£m
140.5
201.8
213.8
556.1
93.6
117.5
82.0
293.1
52.7%
(258.7)
(62.9)
3.8
19.3
(5.4)
(1.0)%
(7.2)
(12.6)
(4.7)
(0.5)
(1.0)
(2.1)
(15.8)
(24.1)
(36.7)
0.6
(36.1)
2020*
£m
287.2
151.6
265.6
704.4
192.5
90.5
94.9
377.9
53.6%
(342.0)
(70.1)
(9.2)
9.1
(34.3)
(4.9)%
Change
%
(51.1)%
33.1%
(19.5)%
(21.1)%
(51.4)%
29.8%
(13.6)%
(22.4)%
(0.9)%pts
(24.4)%
(10.3)%
(141.3)%
112.1%
(84.3)%
(3.9)%pts
(7.5)
(41.8)
(4.0)%
(69.9)%
1.9
(0.3)
(1.9)
–
(124.8)
(125.1)
(166.9)
23.5
(143.4)
(347.4)%
66.7%
(47.4)%
100.0%
87.3%
(80.7)%
(78.0)%
(97.4)%
(74.8)%
* Fulfil From Store (FFS) sales reallocated to Ecommerce in the current year (£8.3m) and prior year (£1.6m) comparatives. The gross margin impact is
£5.2m in the current year and £1.0m in the prior year comparatives. FFS relates to sales made online, but fulfilled from store stock.
** Adjusted operating loss, adjusted margin and adjusted loss before tax are defined as reported results before adjusting items as further explained in
note 6. The comparative in the prior year Annual Report was referred to as ‘Exceptional’.
75
Superdry plc Annual Report 2021 Ecommerce
Ecommerce performance, which is a combination of sales
made through our owned websites and those made online
through third parties, was strong throughout the year, up
33.1% year-on-year. This partially offset lost Store sales,
benefitting from Covid-driven changing shopping habits,
improved product and increased digital marketing, as well as
our influencer led strategy.
Ecommerce participation as a percentage of total Retail
revenue (defined as the total of Store and Ecommerce
revenue) increased from 34.5% to 59.0% which in turn drove
Ecommerce revenue as a participation of total Group
revenue from 21.5% to 36.3%.
Retail revenue
Stores
Ecommerce
Total Retail revenue
Ecommerce revenue as a
proportion of Retail
revenue
Ecommerce revenue as a
proportion of Group
revenue
2021
£m
140.5
201.8
342.3
2020*
£m
287.2
151.6
Change
(51.1)%
33.1%
438.8
(22.0)%
59.0%
34.5% 24.5%pts
36.3%
21.5% 14.8%pts
* Fulfil From Store (FFS) sales reallocated to Ecommerce in the current
year (£8.3m) and prior year (£1.6m) comparatives. FFS relates to sales
made online but fulfilled from store stock.
At the end of the year, Superdry had 21 branded websites,
translated into 13 languages (FY20: 18; 13).
Ecommerce revenue by territory**
UK and Republic of Ireland
Europe
Rest of World
Total Ecommerce revenue
2021
£m
109.1
78.0
14.7
201.8
2020*
£m
69.5
68.7
13.4
151.6
Change
57.0%
13.5%
9.7%
33.1%
*
In the prior year all eBay sales were allocated between UK and RoW. In
FY21 eBay has been allocated to the relevant territory for clarity. To
ensure consistent comparatives, this methodology has been applied
retrospectively to FY20.
** Please note for all channels the geographic territories have been
aligned to the internal management operational structure.
Strategic Report → CFO Review
Group revenue decreased by £148.3m to £556.1m. This
21.1% reduction was driven largely by the forced closure of a
significant part of our store estate as a result of Covid-19
related national or regional lockdowns and the
corresponding impact on our Wholesale partners.
Under IFRS 8 ‘Operating Segments’, Superdry has
historically reported the performance of Stores and
Ecommerce under one segment entitled ‘Retail’ (FY21
£342.3m; FY20 £438.8m). However, due to a significant
shift in consumer behaviour and a material increase in the
Ecommerce sales mix during the pandemic, the Group has
chosen to focus on these channels separately in the
management of the business with distinct reporting and
decision making. The Board has therefore taken the
decision to report across three segments for revenues
and gross profit from FY21 onwards – Stores, Ecommerce
and Wholesale.
The prior year comparatives have been restated to
provide the same level of information for those three
segments. The term Retail will continue to be used to
group together the Ecommerce and Stores segments for
multi-channel reporting.
Stores
Store revenue declined 51.1% to £140.5m in FY21. The
significant impact of the enforced store closures was felt
throughout the year, with an average of 39%1 of store trading
days lost in FY21 (FY20: 10%).
Lost store days
%1
FY20
FY21
YoY
Q1
–%
43%
43%
Q2
–%
4%
4%
Q3
–%
43%
43%
Q4
42%
69%
27%
FY
10%
39%
29%
Even when the stores were able to trade, the high street
experienced substantially reduced footfall from social
distancing measures. There was no material change to the
permanent store footprint in FY21 with only 10 net store
closures (FY20: seven net closures), bringing the total owned
estate to 231 stores at the year end (FY20: 241). Post
year-end we announced the exit from our Regent Street
store and our forthcoming move to a prime high-footfall
location on Oxford Street, due to open in late 2021.
Though it currently appears unlikely we will see further
widespread lockdowns in our major trading markets, we do
anticipate ongoing suppressed footfall to continue
throughout FY22.
Store revenue by territory**
UK and Republic of Ireland
Europe
Rest of World
Total Store revenue
2021
£m
57.4
64.6
18.5
2020*
£m
143.2
107.4
Change
(59.9)%
(39.9)%
36.6
(49.5)%
140.5
287.2
(51.1)%
* Fulfil From Store (FFS) sales reallocated to Ecommerce in the current
year (£8.3m) and prior year (£1.6m) comparatives. FFS relates to sales
made online but fulfilled from store stock.
** Please note for all channels the geographic territories have been
aligned to the internal management operational structure.
76
Superdry plc Annual Report 2021 Strategic Report → CFO Review
Wholesale
Wholesale sales to third parties, which includes online
platforms where the partner fulfils the order, faced similar
pandemic-related market shifts as our owned channels. This
led to sales ending the year down 19.5% at £213.8m and
higher levels of stock carried forward.
At the end of the year, the Group had Wholesale operations
in 53 countries (FY20: 61) including 448 franchise stores
(FY20: 473) and 27 Superdry branded licence stores
(FY20: 26).
Wholesale revenue by territory**
UK and Republic of Ireland
Europe
Rest of World
Total Wholesale revenue
2021
£m
31.0
140.9
41.9
213.8
2020*
£m
Change
41.8
(25.8)%
170.6
(17.4)%
53.2
(21.2)%
265.6
(19.5)%
*
In the prior year Russia and Ukraine were included within Europe.
In FY21 these territories have been reallocated to Rest of World in line
with the internal management structure. To ensure consistent
comparatives, this methodology has been applied retrospectively
to FY20.
** Please note for all channels the geographic territories have been
aligned to the internal management operational structure.
Gross margin
The gross margin has reduced by 90bps to 52.7%, partly
driven by the mix effect of sustained stores closures (our
highest gross margin channel) which contributed (1.4)%pts
and elevated levels of discounting whilst the business
focused on cash generation during the pandemic. These
elements were partially offset by an improvement in the
Wholesale gross margin.
Encouragingly, there was positive momentum in Q4 21 as we
began to return the business to a full price trading stance,
with particular success online where the full price mix2
increased by 11%pts to 46%.
Gross margin by
channel
Stores
Ecommerce
Wholesale
Total gross
margin
YoY
Sales mix
change
2020*
Change
(16%)pts
67.0% (0.4)%pts
15%pts
59.7%
(1.5)%pts
1%pts
35.7%
2.7%pts
53.6% (0.9)%pts
2021
66.6%
58.2%
38.4%
52.7%
* Fulfil From Store sales have been reallocated to Ecommerce, with an
impact on margin of £5.2m in the current year and £1.0m in the prior
year comparatives.
Total operating costs
Selling and
distribution costs
Central costs
Impairment credit/
(losses) on trade
receivables
Other gains and losses
Total operating costs
pre-adjusting items
2021
2020
Change
(258.7)
(342.0)
(62.9)
(70.1)
(24.4)%
(10.3)%
3.8
19.3
(9.2)
9.1
(141.3)%
112.1%
(298.5)
(412.2)
(27.6)%
Total operating costs, pre-adjusting items, reduced by
£113.7m to £298.5m (FY20: £412.2m) and includes store,
distribution, marketing, Head Office, central and
depreciation costs, impairment credit/(losses) on trade
receivables and other gains and losses. The decrease was
partially caused by the disruption from Covid-19 in FY21,
predominantly related to the temporary closure of stores,
together with other continued cost actions taken to improve
efficiencies as we preserved cash through the pandemic.
There are some material movements in lease costs which are
addressed more fully below.
Store costs reduced substantially by £47.9m, as a result
of both one-off benefits and the impact of operational
efficiencies. In FY21 we received £7.9m of furlough support
for store employees and a further £2.5m of government
grants, as well as a £15.7m benefit from UK rates relief. We
have made good progress on recurring cost reductions in
order to drive cost efficiencies, with payroll reducing £11.5m
year-on-year, as we optimised our store staffing.
Distribution, marketing and head office costs decreased
by £21.8m. The main driver was the reduction in the
Wholesale bad debt charge, as a result of cash collections
throughout FY21 being better than initially expected at the
FY20 year-end. This was partially offset by volume-driven
Ecommerce distribution costs, and a planned investment in
both brand and performance marketing in line with the
brand reset.
Depreciation and amortisation totalled £53.4m (FY20:
£87.2m). The year-on-year reduction of £33.8m was
predominantely due to the impact of the prior year
impairment of store-related assets.
77
Superdry plc Annual Report 2021 Strategic Report → CFO Review
Adjusted other gains and losses (which include royalty
income and other income, largely related to lease
renegotiations under IFRS 16) were £19.3m (FY20: £9.1m), an
increase of 112.1%. Although there was a reduction in royalty
income following the decrease in Wholesale revenue, this
has been more than offset by £14.3m of accounting gains on
termination of leases, lease breaks or lease modifications
under IFRS 16.
Finance costs
Net finance costs were roughly in line with the prior year at
£7.2m (FY20: £7.5m). £5.5m (FY20: £5.7m) relates to
interest expense on leases under IFRS 16.
Adjusting items
£m
2021
2020
Change
Adjusted loss before tax
(12.6)
(41.8)
(69.9)%
Unrealised (loss)/gain on
financial derivatives
IFRS2 charge – Founder
Share Plan
Restructuring, strategic
change and other costs
Intangibles Asset
impairment
Store asset impairment
charges and reversals and
onerous property related
contracts provision
Total adjusting items
(4.7)
1.9
(347.4)%
(0.5)
(0.3)
66.7%
(1.0)
(1.9)
(47.4)%
(2.1)
–
100.0%
(15.8)
(24.1)
(124.8)
(87.3)%
(125.1)
(80.7)%
Statutory loss before tax
(36.7)
(166.9)
(78.0)%
Adjusting items relate primarily to store asset net
impairment charges (£10.7m) and an onerous property
related contracts provision (£5.1m), totalling £15.8m (FY20:
£124.8m). The net impairment charge of £10.7m (FY20:
£136.8m) has been allocated between right-of-use assets
(£7.4m, FY20: £121.2m), property, plant and equipment
(£3.3m, FY20: £15.5m) and intangibles (£nil, FY20: £0.1m),
largely due to the extended period of forced store closures
from Covid-19 restrictions and the consequent impact on
expected future footfall.
Other significant adjusting items include a £4.7m loss in
respect of the fair value movement in financial derivatives
(FY20: £1.9m gain) which has been driven by changes to the
timing of derivatives used to hedge Euro receivables and
US Dollar payables and by rate movements during the
hedging period.
Further details on adjusting items can be found in note 6.
Adjusted other gains and losses
Royalty income
IFRS 16 lease modification
and renegotiations
Other income
Total adjusted other
gains and losses
2021
4.2
14.3
0.8
2020
7.2
Change
(41.7)%
–
1.9
100.0%
(57.9)%
19.3
9.1
112.1%
Central costs (£62.9m) includes Head Office costs and
related depreciation which are not attributable to any of the
trading channels, and have decreased by £7.2m as a
consequence of cost control activities including a reduction
in professional fees and discretionary spend.
Lease renewals
The majority of our leases meet the requirements to be
accounted for under IFRS 16 ‘Leases’. Where leases are
turnover rent only or expire within 12 months, they are
outside of the scope of the standard. In FY21, only £5.6m
(FY20: £8.9m) is recognised within Store costs for the gross
rental charge on these leases.
In the current year we recognised a £7.7m credit in Store
costs within the Group Profit and Loss for one-off rent
savings in relation to 82 leases:
Lease category
Leases under IFRS 16
Leases not recognised under IFRS 16
No lease payment due to Covid-
related closures (not IFRS 16)
Total
No. of
leases
62
15
5
82
One-off
saving
£m
4.0
1.9
1.8
7.7
We expect to continue this work and deliver similar results
in FY22, anticipating in excess of £10m further one-off
rent savings.
In addition to these one-off savings, we renewed 39 store
leases (FY20: 17) for an average lease commitment of three
years (FY20: three years). Primarily as a result of those
renewals, the annualised cash rental payments have reduced
by a total of £5.3m3 (FY20: £1.8m).
For leases which are recognised under IFRS 16, the benefit
of the future lease modifications will be seen in the Group
Profit and Loss through a reduction in depreciation and
interest payments and in the Cash Flow Statement through a
reduction in lease payments. In some cases where the lease
liability exceeds the right-of-use asset, there may also be an
element recognised within the other gains and losses on
modification (£14.3m in FY21).
78
Superdry plc Annual Report 2021 Strategic Report → CFO Review
Loss before tax
Despite the significant number of store days lost this year,
the adjusted loss before tax reduced by 69.9% to £(12.6)m,
with cost saving measures and government support helping
to offset trading shortfalls. FY21 includes a £33.8m year-on-
year benefit from reduced depreciation and amortisation,
primarily due to the FY20 impairment charge, and a £14.3m
non-cash credit from lease modifications.
In addition to the above, the statutory loss before tax, after
charging net adjusting items of £(24.1)m (FY20: £125.1m),
reduced by 78.0% to £(36.7)m.
Taxation in the period
Our tax credit on adjusted losses is £3.3m (FY20: £6.1m tax
credit on adjusted profit). This represents an adjusted
effective tax rate of (26.2)% (FY20: 14.6%).
Our tax charge on statutory losses is £0.6m (FY20: £23.5m
tax credit on statutory loss). This represents an effective tax
rate of 1.6% (FY20: 14.1%).
The Group’s adjusted effective tax rate is lower than the
statutory rate of 19% (FY20: 19%). This is primarily due to
movements in deferred taxation recognised in respect of
leases, tax losses and the provision made for uncertain tax
position as required by accounting standards.
The net tax credit on adjusting items totals £3.9m (FY20:
£17.3m tax credit), which arises primarily as a result of
impairments to the right-of-use asset values, and
impairments to property, plant and equipment (PPE), at the
balance sheet date.
Loss after tax
After adjusting items, Group statutory loss after tax for the
year was £36.1m, compared to a £143.4m loss in FY20.
Loss per share
Reflecting the loss achieved by the Group during the year,
adjusted basic EPS is (19.4)p (FY20: EPS (43.5)p).
The adjusted performance of the business, offset by the
adjusting items outlined above, results in a reported basic
EPS of (44.0)p (FY20: EPS (174.9)p) based on a basic
weighted average of 82,028,188 shares (FY20: 82,001,955
shares). The increase in the basic weighted average
number of shares is predominantly due to 31,032 5p
ordinary shares being issued during the year under Buy
As You Earn schemes.
Adjusted diluted EPS is (19.4)p (FY20: EPS (43.3)p) and
diluted EPS is (44.0)p (FY20: EPS (174.1)p. These are based
on a diluted weighted average of 82,028,188 shares (FY20:
82,389,450 shares). Due to the loss-making position of the
Group at the year-end, all potential ordinary shares are
considered to be antidilutive.
Dividends
Given the ongoing uncertainty and in order to maintain
liquidity, the Board did not propose an interim dividend and
has made the decision not to recommend a final dividend
for FY21.
Cash flow
There has been a continued focus on cash preservation this
year and the Group has maintained strong liquidity, ending
the year with net cash of £38.9m, up £2.2m year-on-year
and having not drawn down during the year on the ABL
facility at any point.
£m
Operating cash flow before
movements in working capital
Working capital movement
Taxes
Net cash generated from operations
Purchase of PPE and intangible
assets
Proceeds from disposal of assets held
for sale
Dividend payments
Net interest paid
Proceeds of issued share capital
Drawdown of RCF
Repayment of RCF
Repayment of lease liability principal
Net (decrease)/increase in cash
Other (including foreign currency
movement)
Net cash and cash equivalents at
end of period
2021
£m
2020
£m
29.7
20.4
2.5
52.6
75.5
12.0
(2.2)
85.3
(13.6)
(13.9)
–
–
(7.2)
0.1
–
–
(39.9)
(8.0)
2.4
(3.4)
(7.5)
–
(30.0)
30.0
(61.1)
1.8
10.2
(1.0)
38.9
36.7
Superdry remains a strongly cash-generative business, with
net cash generated from operations of £52.6m (FY20:
£85.3m). This has decreased year-on-year due to significant
impact from the forced store closures during the year as a
result of the ongoing disruption from Covid-19.
Movements in working capital generated a cash inflow of
£20.4m (FY20: £12.0m) driven by a decrease in inventories
of £6.2m, a net increase in trade and other receivables of
£10.8m and an increase in trade and other payables of
£25.0m, largely due to deferred rent arising from Covid-19
related store closures. We expect to repay the majority of
the deferred rent through FY22, though anticipate that a
proportion will crystallise as a permanent benefit as a result
of ongoing lease negotiations.
79
Superdry plc Annual Report 2021 Strategic Report → CFO Review
Working capital
£m
Inventories
Trade and other receivables
Trade and other payables
Net working capital
2021
£m
148.3
102.3
2020
£m
158.7
91.6
Change
(6.6)%
11.7%
(126.5)
(103.3)
22.5%
124.1
147.0
(15.6)%
Inventory levels decreased by 2.3m units, 14% in FY21,
despite lower sales and enforced store closures. The
average cost per unit increased due to a higher mix of
Autumn/Winter product in the stock at year end (39% vs
35%), resulting in an overall decrease in the inventory
balance of 6.6% to £148.3m. We would expect this mix to
normalise as the operational disruption from Covid reduces.
The inventory balance is net of a provision of £9.1m (FY20:
£9.8m). This is after a £(3.8)m release of a £6.1m Covid-
related provision booked in FY20 against SS20 product
following better than expected recovery. This release was
broadly offset by a one-off £4.1m provision in relation to
high-end AW20 concept product, which has proven to be
unsuccessful particularly considering the launch in a
Covid-19 environment (FY20: £nil).
Total trade and other receivables increased 11.7% to
£102.3m because of the disruptive impact on both
shipments and sales to Wholesale partners in the prior year.
Although cash collections have been ahead of internal
expectations, the partner support programmes have led to a
temporary increase in debtor days from 47.5 days to 67.3
days. However, there has been a reduction in the level of
expected credit loss which is reflective of the quality in the
current debtor book. See note 24 for more information.
Total trade and other payables increased by 22.5% to
£126.5m largely due to deferred rent for non-IFRS 16
leases of £11m included within the balance and the later
timing of inventory shipments towards the end of FY21. The
deferred rent for IFRS 16 leases of £24m is included within
lease liabilities.
Net working capital decreased by 15.6% to £124.1m (FY20:
£147.0m) and as a proportion of Group revenue was 22.3%
(FY20: 20.9%).
Capital expenditure
Additions in property, plant and equipment and intangible
assets totalled £13.8m (FY20: £13.7m). Capital expenditure
has remained suppressed as a result of short-term cash
preservation initiatives during Covid-19. Spend has been and
will continue to be focused on IT systems and technology as
we support Ecommerce as our channel of growth.
At 24 April 2021, the net book value of property, plant and
equipment had decreased to £29.4m (FY20: £41.7m) as a
consequence of the store impairment and depreciation
charges. During the year, £6.8m (FY20: £6.5m) of capital
additions were made, of which £2.3m (FY20: £1.6m) related
to leasehold improvements across the Group. The remaining
balance of capital additions includes furniture, fixtures and
fittings (£3.5m) and computer equipment (£1.0m).
Intangible assets, comprising goodwill, lease premiums,
distribution agreements, trademarks, website, and computer
software, stood at £41.7m at the year end (FY20: £48.4m).
Additions in the year were £7.0m (FY20: £7.2m), comprising
mainly website and software additions.
Internal controls
In the prior year, a number of accounting and control issues
were identified in the business. In response to this a review
of the internal control environment was carried out by the
Audit Committee. External advisers (PwC) were engaged to
support the development of an improved internal controls
framework, which included mapping key risks to business
processes and developing controls to mitigate these risks.
Priority was placed on delivering material improvements for
the FY21 year-end close, including remediating balance
sheet controls around inventory, accounts payable, cash,
and the month end close and review processes.
Although there has been improvement leading up to the end
of FY21, work remains and will continue through FY22. The
process of establishing a fully robust control environment
remains one of our top priorities and we are confident in the
progress being made. Further details can be found in the
Audit Committee Report on page 97.
Outlook
Whilst significant market uncertainty remains, we do expect
a recovery in total revenue in FY22, driven by:
• Improving store trading from gradually improving footfall
throughout the year, although not reaching historic levels;
• Strong two-year Ecommerce growth compared to FY20,
but suppressed year-on-year as we anniversary tough
promotion-driven comparatives and some online trade
switches back into physical stores; and
• A modest, but sustainable revenue recovery in Wholesale.
We expect margin to increase across all channels as we
transition towards a full price stance, supported by further
mix benefits from the switch back into stores.
We expect to generate operating leverage from reduced
store rents and payroll compared to pre-Covid levels,
although we anticipate a £35-45m year-on-year increase in
costs due to one-off benefits recognised in FY21, such as the
return of UK business rates, the end of furlough support, and
the normalisation of other variable and discretionary costs.
We are continuing to focus on cash generation and working
capital efficiency in FY22. We expect to reduce inventory by
a further 2m units, which will partially offset the unwind of
deferred rent and service charges (£40m, inclusive of VAT),
some of which we expect to crystallise as permanent savings
as we continue to negotiate lease terms.
Recognising the structural growth opportunity in
Ecommerce, as well as the geographic and customer
segmental targeting opportunities in our Wholesale
business, we expect revenue to exceed peak historic levels
in the medium term. Disciplined full price trading, continuing
rent renegotiations, and the operating leverage from cost
savings will also return the business to historic operating
profit margins.
80
Superdry plc Annual Report 2021 Strategic Report → CFO Review
Assessment of Group’s prospects
The financial position of the Group, its cash flows and
liquidity position are set out in the financial statements.
Furthermore, the Group financial statements include the
Group’s objectives and policies for managing its capital, its
financial risk management objectives, details of its financial
instruments and exposure to credit and liquidity risk (please
refer to note 34).
Background – Impact of continuing lockdowns and social
distancing restrictions in FY21
The lasting impact of the pandemic saw unprecedented
levels of disruption throughout FY21. Following the ‘initial
wave’ of lockdowns, beginning March 2020 and impacting
much of the first quarter of FY21, infection rates in our key
markets substantially reduced by late September 2020 and,
with the majority of our owned store estate reopening, the
prevailing view at that time was that further widespread
lockdowns appeared unlikely.
However, the announcement of a second wave of lockdowns
resulted in temporary store closures in the UK and certain
EU markets from late October 2020, albeit with a brief
opening period before a further hard lockdown from January
through to April 2021. Together with the wider factors
affecting open stores, such as social distancing measures
and broader economic and health concerns, the Group saw a
continued suppression of footfall in stores which was only
partially offset by Ecommerce sales.
In total, the business lost an unprecedented 39% of store
trading days in FY21 (FY20: 10%); a conservative measure
which does not reflect other impacts such as shortened
trading hours, appointment-only openings, and general
operational disruptions from the ever-changing government
regulations. By the end of June 2021, most of our owned
stores had reopened although footfall remains subdued as
the economic recovery continues.
Though there is no certainty that there will not be further
lockdowns, vaccine rollouts are progressing well in many of
our core markets, and government communications reflect
an increasing pressure to re-open economies.
There are several key mitigations that the Group has
undertaken to partially offset the adverse revenue impacts of
these lockdowns:
• As a consequence of the protracted lockdown periods in
FY21, we recognised £7.7m of one-off rent savings relating
to the disrupted periods, with at least a further £10m
expected to be realised in FY22. These one-off rent
benefits are in addition to the ongoing lease renewal
savings that have been achieved to date, which we expect
will continue to be realised as we review our store estate.
• In many markets, governments have extended furlough
support where store closures have been mandated.
Superdry has received £9.2m of furlough support in FY21,
predominantly relating to store colleagues. We have also
claimed £2.5m in government grants for business
disruption support.
• A reduction in future stock purchases, aided by the carry
over and recoding of core product, remains our largest
cash mitigation. In addition to the volume of intake, we will
continue to work closely with our suppliers to manage
payment terms, particularly through our cash trough
ahead of the Autumn/Winter season.
Liquidity headroom
On 10 August 2020 the Group announced that it had
completed a refinancing of its facilities, moving from a
Revolving Credit Facility (RCF) of £70m, due to expire in
January 2022, to a new Asset Backed Lending (ABL) facility
for up to £70m, due to expire in January 2023, with amended
covenants (detailed in the Covenant testing section below)
and the option to extend, at the discretion of the lender, for a
further 12 months.
The Group’s ability to preserve and manage cash has been
clearly evidenced (and detailed in the Mitigating actions
section, below), with the business maintaining a positive net
cash balance in excess of £20m throughout FY21, despite
the pressures of the pandemic.
In addition, the Group has an overdraft facility of up to £10m
available on a rolling annual basis, albeit as this is not
committed, it has not been considered by management as
part of the going concern or viability assessment.
Base case
The Group’s going concern assessment has been based on a
12-month financial plan (the Plan) derived from the latest
FY22 and FY23 forecasts. Though the effects of Covid-19 on
consumer behaviour long term are yet to be fully understood,
the trading outlook for the Group has improved relative to
the prior year, which is reflected in the Plan.
In determining the Plan, management has made a number of
assumptions regarding the Group’s trading performance in
light of the coronavirus pandemic. The most significant of
those are:
• All trading channels benefit from ongoing product
improvements, operational initiatives and marketing
activity to support the brand reset which began in October
2020, the full benefit of which is not yet realised, given the
ongoing store closures in FY21.
• Stores trade for substantially all of FY22 following the
reopening of those European markets which remained
closed at the start of the financial year. Trading is
assumed to recover steadily over the duration of FY22 as
stores reopen and consumer demand returns, reflecting
the macroeconomic uncertainties in FY22 and the ongoing
channel shift towards online. Profitability will be delivered
through full price trading margins, the recurring benefits of
renegotiated leases and store payroll optimisation in FY21,
but with store revenues remaining below pre-Covid levels
in FY22.
• UK property rates are conservatively assumed to
return from April 2022 (£16m annualised cost), following
the end of the current rates relief measures announced by
the government.
81
Superdry plc Annual Report 2021 Strategic Report → CFO Review
• Ecommerce trading benefits from the underlying and
• a reduction in Head Office costs and discretionary
recently accelerated channel shift towards digital from
physical retailing, together with planned investments to
improve the website user experience. However, the plan
reflects a tougher comparable period in 2021 and an
element of targeted promotional activity to clear excess
stock and generate cash, with modest growth forecast in
the balance of FY22.
• Wholesale performance begins to recover in FY22,
reflecting the latest forward order book and the
continuation of FY21 trends such as increased in-season
orders to online partners, recovering to pre-Covid-19 levels
over the medium term.
• Gross margin rate recovers as we reduce the level of
promotional activity from FY21 and return to a full price
stance in FY22. Channel mix benefits will be realised as
stores (our highest margin channel) trade for the duration
of the year.
• Increased marketing spend in FY22 to reflect increased
performance marketing in the short term together with
longer-term brand investment as part of the turnaround.
• As a consequence of the impact of Covid-19 on global
trade, the Group and the Company are aware of
constraints to the global supply of containers for shipping
goods from Asia to Europe and, while the Group remains
confident that the majority of goods will be shipped, it is
expected that the cost of these shipments will increase
in FY22.
Reverse stress test
Given the base case reflects both the results of the
turnaround plan and the uncertainties surrounding forecasts
due to Covid-19, the Group has modelled a ‘reverse stress
test’ scenario.
A reverse stress test calculates the shortfall to forecast
sales in the Plan that the Group would be able to absorb,
after implementing feasible mitigating actions, before either:
a. requiring additional sources of financing, in excess of
those that are committed; or
b. breaching the lending covenants on our
committed facility.
Given the projected headroom over our covenants, and our
proven ability to manage cash, management considers the
likelihood of breaching our facilities to be remote.
This assessment is linked to a robust assessment of the
principal risks facing the Group, and the reverse stress test
reflects the potential impact of these risks being realised.
The principal risks are outlined in the ‘How We Manage Our
Risks’ section on page 56.
Mitigating actions
If performance deviates materially from the Base Case Plan,
the impact could result in a reduction in liquidity and/or a
longer period of lower profitability, which in turn could risk
covenant breaches. Management has considered what
plausible mitigating actions are available to them, including:
• a reduction in uncommitted capital expenditure;
spend; and
• reducing the purchase quantities of new season stock in
line with the lower sales projections.
Consequently, management believes that the likelihood of
further downsides in revenue, beyond those modelled in the
reverse stress test, that cannot be mitigated adequately, to
be remote. However, should the mitigating actions outlined
above not be sufficient, management would likely adapt the
current store portfolio strategy to exit a greater proportion
of stores.
Covenant testing
Our facilities include an Asset Backed Lending (ABL)
facility for up to £70m, together with a £10m
uncommitted overdraft.
Our relationship with our lending group remains strong, with
covenant resets agreed in both January and July 2021 as the
macroeconomic impact of social distancing and lockdown
restrictions continued to extend past initial expectations
when the financing was agreed in August 2020.
The amended covenants in the ABL facility are tested
quarterly and are based around the Group’s adjusted
EBITDAR (relative to the Base Case Plan) until the end of Q2
22 and fixed charge (rent and interest) cover thereafter. The
covenants are tested on a ‘frozen GAAP’ basis and hence
accounting under IFRS 16 does not impact them.
Under the reverse stress test, which tests for the breakeven
point against our borrowing facilities (liquidity and covenants
are tested separately), the July 2022 (Q2 23) covenant test
would breach first. However, management considers the
likelihood of experiencing revenue shortfall required to cause
this breach to be remote. The Directors are confident that
under the mitigated reverse stress test there is sufficient
liquidity headroom over the going concern period.
If this scenario was to occur, management would approach
lenders for a covenant waiver. Whilst there would be no
guarantee that such a waiver would be made available, in
making their assessment management notes that it currently
has a good relationship with the Group’s lenders and has
held positive discussions throughout the year. These lenders
have been made aware of all key inputs into the Base Case
Plan, as well as the implications of the short-term disruption,
and have now agreed to re-gear the covenants on two
occasions, to reflect the unforeseen duration and magnitude
of the impact from Covid-19. In addition, it should be noted
that the Group expects to be cash positive for most of the
year, allowing for the normal seasonal working capital cycle,
with substantial liquidity maintained throughout the going
concern period.
Significant judgements
In using these financial forecasts for the going concern
assessment, the Group’s Directors recognise that significant
judgement was required to decide what assumptions to
make regarding the impact of the coronavirus pandemic on
the retail sector and wider economy and specifically to
Superdry, and the ability to execute the turnaround plans
required to recover brand health and return the business to
82
Superdry plc Annual Report 2021 Strategic Report → CFO Review
profitable growth. Consequently, though the level of visibility
has improved year on year, there remains more uncertainty
than would usually be the case in making the key judgements
and assumptions that underpin the financial forecasts for
the business. The Directors believe that this uncertainty is
reflected in the Base Case Plan, and trading year to date
continues to give us confidence that we are through the
worst effects of the pandemic.
The Plan does not anticipate a further, extended period of
store closures, and the likelihood of this scenario is deemed
remote. While it is conceivable that there is a further
territory-wide lockdown, key factors in making this
judgement include:
• vaccine rollouts are progressing well in many of our
core markets;
• social distancing restrictions have been relaxed far more
significantly than in between previous lockdowns, with
broader cultural acceptance of the need for hygiene
measures (e.g. mask-wearing and hand sanitising);
• government communications reflect an increasing
pressure to re-open economies, with furlough support
coming to an end on 30 September 2021 in the UK.
In the event that this were to happen, it could cause revenue
declines to exceed those in the reverse stress test, however,
this would likely result in corresponding government support
(e.g. in the form of furlough and rent moratorium) being
available to mitigate the worst effects, together with
implementing similar cash preservation measures as were
deployed in FY21.
Summary
After considering the forecasts, sensitivities and mitigating
actions available to management and having regard to the
risks and uncertainties to which the Group is exposed, the
Directors have a reasonable expectation that the Company
and the Group has adequate resources to continue operating
for the foreseeable future, and to operate within its
borrowing facilities and covenants for a period of at least 12
months from the date of signing the financial statements,
taking into account the working capital troughs in both FY21
and FY22. Accordingly, the financial statements continue to
be prepared on the going concern basis.
Viability
In line with the UK Corporate Governance Code, the
Directors have assessed the prospects of the Group over a
longer period than that required by the ‘going concern’
provision. The Directors have assessed the viability of the
Group over the five-year period through to FY26 using the
medium-term financial plan (the ‘Medium Term Plan’). This
Medium Term Plan is in its early stages of implementation
(having been delayed due to the Covid-19 pandemic). It
assumes the successful execution of the turnaround
strategy to reset the brand, reversing the decline in
performance which began in FY19 and returning the Group
to FY18 revenues and profitability over the medium/
longer-term horizon.
The five-year viability period coincides with the Group’s
strategic review period. Furthermore, beyond this period,
performance is increasingly difficult to predict, exacerbated
by the impact of Covid-19.
The viability assessment has considered the potential impact
of the principal risks on the business in particular future
performance (including the success of the brand reset and
turnaround strategy, and the broader economic recovery) and
liquidity over the Plan. In making this statement, the Directors
have considered the resilience of the Group under varying
market conditions together with the effectiveness of any
mitigating actions and the availability of financing facilities.
As already described in the statement regarding going
concern, as part of this assessment the Directors have
considered an extended reverse stress test over the viability
period with similar mitigations as under the going concern
assessment, and have taken account of the availability of the
Group’s ABL.
Whilst recognising the challenging retail environment will
increase the risks and costs around the future refinancing of
this facility, based on current market conditions and our
proven ability to manage cash during the pandemic, the
Directors believe that Superdry has the appropriate plans,
current assets, and mitigations in place to maximise the
prospects of a successful renewal in advance of the January
2023 ABL expiry. The viability assessment therefore assumes
that the Group renews on existing or better terms through the
duration of the viability period.
Under the reverse stress test, which tests for the breakeven
point against our borrowing facilities (liquidity and covenants
are tested separately), the July 2022 (Q2 23) covenant test
would breach first, in line with the going concern test. Given
the assumed recovery in trading post-Covid in the Medium
Term Plan, both liquidity and covenant headroom in the outer
years of the plan are higher than in FY23. The reverse stress
test indicated that, after taking account of the mitigating
actions highlighted in the going concern assessment above,
the Group would be able to operate within its funding facilities
for the five-year assessment period. However, a sustained
downturn as a result of the new strategy not turning the
business around, or an unexpected failure to renew the ABL
in January 2023, would threaten the viability of the business
over this five-year assessment period.
Based on this assessment, the Directors have a reasonable
expectation that the Group will have sufficient resources to
continue in operation and meet its liabilities as they fall due
over the period to April 2026.
Julian Dunkerton
Chief Executive Officer
Shaun Wills
Chief Financial Officer
15 September 2021
15 September 2021
1.
‘Lost trading days’ calculated as the simple average number of stores
closed each day of the period as a percentage of total potential trading
days in the period, excludes impact of restricted trading hours.
2. Full price sales mix relates to the proportion of retail sales made at
RRP in full priced stores and owned websites only.
3. Cash annualised saving has been calculated based on the effective
date of the lease agreement.
83
Superdry plc Annual Report 2021 Governance → Board of Directors
Board of Directors
N
A R N
Peter Sjölander
Independent Chairman
Appointed: 29 April 2021
Tenure*: 5 months
Peter was CEO of Helly Hansen
from 2007 to 2015, where he
delivered a step change in the
performance of the brand, driving
its transition from being a business
focused on its local Scandinavian
markets to a globally recognised
brand. Earlier in his career, Peter
spent 13 years at Nike in a number
of leadership roles across
marketing, product and general
management, working in the
Nordics, Netherlands and USA at a
time of rapid growth for the brand.
Following that, Peter joined
Electrolux where he was responsible
for brand and product, driving a
shift from an industrial agenda
to a consumer-centric one. He is
currently a Non-Executive Director
of Dometic Group AB (listed in
Sweden) and Fiskars Oyj (listed
in Finland).
He is also a senior adviser to Altor
Equity Partners and EQT Group.
Contribution to the long-term
success of Superdry
Peter brings international, brand,
turnaround and digital expertise and
leadership to the Superdry Board.
Julian Dunkerton
Executive Director
Shaun Wills
Executive Director
Helen Weir
Independent Non-Executive Director
Appointed: 2 April 2019
Tenure*: 2 years 6 months
Appointed: 26 April 2021
Tenure*: 5 months
Appointed: 11 July 2019
Tenure*: 2 years 3 months
Julian co-founded Superdry in
2003 and went on to build a global
retail business and brand with a
reputation for quality, fit, design, and
value for money. In 2010, Julian led
the successful float of Superdry on
the London Stock Exchange at an
initial value of £400m.
In 2015, Julian stepped down from
his role as Chief Executive, returning
to Superdry in April 2019, and he
was appointed permanent CEO
in December 2020.
Julian continues to focus on brand
and design and is an ambassador
for sustainability.
Contribution to the long-term
success of Superdry
Julian has huge passion for and
commitment to the Superdry brand
and has substantial knowledge of
Superdry products and markets.
Julian leads on sustainability.
Shaun joined Superdry in April 2021
and brings over 30 years’ experience
gained in a number of household-
name clothing brands and retailers,
most recently as Finance Director of
Marks and Spencer’s Clothing and
Home division. He has operated in
both fast-growth and turnaround
situations and is well versed in
digital transformation and the
complexities of international
expansion. As well as having held a
number of CFO roles, he has also
held leadership roles in Ecommerce,
strategy, merchandising, property
and logistics, and has experience
as CEO of a multi-brand business.
Shaun is a member of the Chartered
Institute of Management Accountants.
Contribution to the long-term
success of Superdry
Shaun’s significant retail
and financial experience in
transformation environments
provides the Board and the
Company with strong
financial leadership.
Helen is the Senior Independent
Director and is also the designated
NED for colleague engagement. She
has extensive experience of both
publicly quoted companies and retail
businesses, having been Finance
Director of Marks and Spencer, John
Lewis, Lloyds Bank (where she was
also the CEO of the Retail Bank) and
Kingfisher. Helen is a member of the
Supervisory Board of Koninklijke
Ahold Delhaize N.V. where she chairs
the Governance and Nomination
Committee, and a Non-Executive
Director of Greencore Group, where
she chairs the Audit Committee.
Helen is also a Trustee of Marie
Curie. Her previous non-Executive
roles include SABMiller, Royal Mail,
and Just Eat. Helen is a Fellow of the
Chartered Institute of Management
Accountants and was awarded a
CBE for services to Finance in the
2008 honours list.
Contribution to the long-term
success of Superdry
Helen’s extensive financial and
retail experience, her commitment
to colleague engagement and her
work with the SD Voice.
Helen has shown extraordinary
commitment to Superdry over the
past year when the Company was
impacted by Covid-19.
Skills, knowledge and
experience
• International exposure
• Brand transformation
• Digital expertise
• Retail
• Extensive commercial
experience
• Company turnaround
experience
Skills, knowledge and
experience
• Entrepreneurial insight
• Retail
• International exposure
• Founder of Superdry
• Extensive knowledge of
Superdry product and brand
• Sustainability
Skills, knowledge and
experience
Skills, knowledge and
experience
• Extensive financial expertise
• Retail
• Listed companies
• Multi-brand business
• Digital expertise
• Change and transformation
• International exposure
• Digital expertise
• Extensive financial expertise
• Retail
• Listed companies
• Brand
• Change and transformation
• Governance
• International exposure
• Supply chain
• Colleague engagement
84
Superdry plc Annual Report 2021 Governance → Board of Directors
A R N
A R N
A R N
Faisal Galaria
Independent Non-Executive
Director
Appointed: 29 July 2019
Tenure*: 2 years 2 months
Georgina Harvey
Independent Non-Executive
Director
Appointed: 29 July 2019
Tenure*: 2 years 2 months
Faisal brings extensive digital
expertise to the Superdry Board.
Faisal is the CEO of Blippar, a global
Augmented Reality technology
company. Previously, he was the
Chief Strategy and Investment
Officer of GoCompare Group,
where he helped lead its listing on
the London Stock Exchange in
November 2016 and oversaw
several successful acquisitions. He
has held senior roles at a number
of leading global digital businesses
including Spotify, Kayak.com and
Skype and has extensive experience
in management consulting, as a
partner at Alvarez & Marsal
and Andersen.
Contribution to the long-term
success of Superdry
Faisal is an experienced CEO
in the digital sector and brings
international, company turnaround
and M&A experience. He also
spends additional time with the
Board and Executive Team offering
digital and technological expertise.
Faisal has shown extraordinary
commitment to Superdry over the
past year when the Company was
impacted by Covid-19.
Georgina is an experienced
Non-Executive Director and is a
member of the Board of McColls
Retail Group plc, where she is Senior
Independent Director and Chair of
the Remuneration Committee, and
a member of the Board of Capita
plc, where she is Chair of the
Remuneration Committee. Prior
to developing her portfolio career,
Georgina spent seven years as
managing director of Regionals
at Trinity Mirror, sitting on the
Executive Committee.
Contribution to the long-term
success of Superdry
Georgina’s commercial experience
and specialist knowledge of and
leadership on remuneration matters,
including investor consultation on
remuneration policy. Georgina has
spent additional time working
with our Global Sourcing and
Sustainability Director on
sustainability matters.
Georgina has shown extraordinary
commitment to Superdry over the
past year when the Company was
impacted by Covid-19.
Alastair Miller
Independent Non-Executive Director
Appointed: 11 July 2019
Tenure*: 2 years 3 months
Alastair is a Non-Executive Director
of NewRiver REIT plc, a property
investment company specialising in
retail assets, where he is the Senior
Independent Director and Chairman
of the Remuneration Committee.
Alastair was Chief Financial Officer
at New Look from 2000 until 2014
and was one of the MBO team who
helped take the company private
in 2004 and led a number of
subsequent refinancings. Previously,
he was the Group Finance Director
at RAC, having joined from Price
Waterhouse where he was a
management consultant. Prior to
that he was Finance Director of a
company within the BTR plc Group.
Alastair qualified as a Chartered
Accountant with Deloitte Haskins
and Sells and holds a BSc
in Economics.
Contribution to the long-term
success of Superdry
Alastair’s experience in finance
and audit, his leadership of the Audit
Committee and his work with the
Executive Team on finance and
audit related matters.
Alastair has shown extraordinary
commitment to Superdry over the
past year when the Company was
impacted by Covid-19.
Skills, knowledge and
experience
• Listed companies
• Digital expertise
• Extensive commercial
experience
• Company turnaround
experience
• M&A experience
Skills, knowledge and
experience
• Retail
• Listed companies
• Remuneration expertise
• Extensive commercial
experience
• Digital expertise
Skills, knowledge and
experience
• Extensive financial expertise
• Audit related expertise
• Retail
• Listed companies
• Brand
Ruth Daniels
Group General Counsel and
Company Secretary
Appointed: 3 February 2020
Ruth joined Superdry in
February 2020 and brings
30 years of legal, governance
and commercial experience
from private practice, as well as
in-house roles at Ancestry.com,
CPA Global and Global Media &
Entertainment. Ruth has acted
for key brands and brings
extensive experience of working
in digital and international
environments, as well as those
undergoing transformation.
Before qualifying as a lawyer,
Ruth began her career in Retail.
A Audit Committee
R Remuneration Committee
N Nomination Committee
Chair of Committee
Departures during FY21
• Nick Gresham resigned on
15 October 2020
• Peter Williams resigned on
29 April 2021
Election or re-election at AGM
Board/
Committee
member
Peter Sjölander
Julian Dunkerton
Shaun Wills
Faisal Galaria
Georgina Harvey
Alastair Miller
Helen Weir
Election
Re-
election
●
●
●
●
●
●
●
* At time of AGM (22 October 20)
85
Superdry plc Annual Report 2021 Governance - Chair’s Governance Review
Introduction from the new Chair
Guiding the strategy
During FY21, the Board held several strategy days with
the Executive Committee to work together on a long-term
strategy. These days were important opportunities for the
Board and Executive Team to share information on a more
informal basis, and to discuss new ideas – please refer to the
Board activities and discussions section of this report on
page 91 for more information. Please turn to the Strategic
Report from page 3 to read about our strategy. Regular
updates on the development of the strategy were received
by the Board at its scheduled meetings throughout FY21, in
the CEO reports to the Board.
Prioritising People, diversity and inclusion
and culture
The Board has made People at Superdry one of its
priorities this year in several ways: reviewing colleague Pulse
Surveys, a dedicated Board meeting session on workforce
engagement, receiving regular People updates at Board
meetings, visiting stores and Head Office (when safe to do
so), and through the work carried out by Helen Weir, the
designated NED for colleague engagement. Our Board
Diversity and Inclusion Policy was reviewed and updated,
and targets for the recruitment of a more diverse workforce
were put in place – please refer to ‘Our People’ on page 48
for details.
Sustainability
Superdry has committed itself to a more sustainable future.
The Board approved the Group’s ‘Grow Future Thinking’
initiative in November 2020, which combines sustainability
and environment, people and culture, creative and talent,
and supply chain responsibility and community, to enable
Superdry to become a truly sustainable brand. Please turn to
the Sustainability Report on page 36 for more information.
Compliance with the UK Code of Corporate
Governance 2018 (Code)
During FY21, Superdry has complied with all of the provisions
of the Code, except for part of provision 38. Part of provision
38 requires the pension contribution rates for Executive
Directors to be aligned with those available to the workforce.
The remuneration agreements of the Executive Directors who
served during the period under review provided for pension
contribution rates in excess of those of the workforce. During
FY20, the Group revised its Remuneration Policy, with a
target to align pension contributions for the Executive
Directors with those of the workforce by FY21. Superdry’s
Executive Director pensions were fully aligned to the
workforce from 1 April 2021 and will remain aligned. Full
details of Executive Director remuneration can be found
in the Directors’ Remuneration Report on page 104.
The rest of this report provides further information about how
we have applied the principles of the Code to Superdry, our
governance framework, and the Board’s activities and
discussions in FY21.
Peter Sjölander
Chair
15 September 2021
86
Welcome to my first Corporate Governance
Report as Chair of Superdry plc. I am
committed to leading a culture which applies
the spirit of the Code and of corporate
governance best practice across our
organisation, and to the continuous
development of strong, robust and
efficient governing structures at Superdry.
Responding to the Covid-19 pandemic
The Covid-19 pandemic, which began in FY20, continued to
severely impact our operations throughout FY21. The Board
held weekly virtual meetings in the early part of the financial
year to continue to monitor the organisation’s responses to
the lockdowns and store closures, putting the health and
safety of our colleagues and customers first, and monitoring
our cash flows carefully. The Incident Management Team
of our Executive Committee met as necessary to manage
day-to-day operations and to respond to events quickly.
Our response to Covid-19 is fully explained in the Strategic
Report on page 20.
“I am committed to leading a culture
which applies the spirit of the Code
and of corporate governance best
practice across our organisation.”
Peter Sjölander
Superdry plc Annual Report 2021 Governance → Corporate Governance Report
Applying the principles of the Code
Board leadership and Company purpose
Superdry is led by a Board of Directors consisting of
individuals with commercial, retail, digital and financial
expertise – please refer to the biographies on page 84 for full
details. The Section 172 Statement on page 68 explains how
the Directors have fulfilled their duty to promote the success
of the Group for shareholders, whilst having regard to a
range of other stakeholders, including the wider community.
Our recruitment and selection processes, as documented in
the Nomination Committee Report on page 93, ensure that
suitably experienced and high calibre candidates from
diverse backgrounds are found. Anticipated time
commitments are noted to potential candidates during that
process and are set out in service contracts. Our induction
processes provide our Directors with sufficient information
about our culture, practices and expectations. Our annual
Board review helps to ensure that Board dynamics, functions
and processes are working and continue to work well –
please refer to page 92 in this report for full details.
Information about our Board induction process can be found
in the Nomination Committee Report on page 93.
Superdry has a clearly defined purpose (our Mission)
which has been approved by the Board: to inspire and
engage style-obsessed consumers while leaving a positive
environmental legacy. There is a clearly defined and Board
approved strategy (please refer to page 26 in the Strategic
Report). Our purpose and strategy have been clearly
communicated to colleagues through our colleague
engagement mechanisms – primarily through the SD Voice,
but also through Superdry Live sessions on Workplace (our
internal communications platform), via Workplace posts, by
obtaining feedback though the SD Voice and Pulse Surveys,
by using StorIQ to communicate with store colleagues, and
by using direct communication through senior leadership at
team meetings across the business. There is a designated
NED for colleague engagement, Helen Weir, and during the
year she and the Board have met with the SD Voice. Regular
People briefings are included in the CEO report that is
received at each scheduled meeting to assist the Board in
relation to the oversight of culture at Superdry. Please turn
to ‘Our People’ on page 48 for further information about
colleague consultation and engagement, about our culture,
and the ways in which we keep in touch with colleagues.
Each of the NEDs has spent time with members of
DIRECTORS’ SKILLS MATRIX
the Executive Team, the Senior Leadership Team and
colleagues. The Board holds regular scheduled meetings
and strategy days, at which it reviews detailed information
from all areas of the business to allow it to monitor progress
against strategic objectives. The Board receives detailed
analysis of financial and non-financial information, including
key performance metrics, to enable the appropriate
allocation of resources.
A framework of internal controls is in place, and the
effectiveness of the controls framework is reviewed on an
annual basis. In FY20, the Group commenced a thorough
review of the effectiveness of its internal controls framework.
A number of control deficiencies were identified, and
remediation plans were put in place. The Audit Committee
has monitored progress of the remediation project during
FY21, and regular updates have been provided. Whilst
improvements have been made, progress has been impacted
by Covid-19 and this will remain a top priority for the Audit
Committee in FY22. Please refer to the Audit Committee
Report on page 97 for further information.
A risk management and mitigation framework is in place, to
allow the Board to have oversight of risk through regular risk
reports – please refer to ‘How We Manage Our Risks’ on
page 56 for further details.
The Group’s stakeholders and its means of engaging with
them have been identified. For further information please
refer to our Section 172 Statement on page 68.
Superdry’s workforce policies and practices are aligned to its
culture and to the strategy (for further details on our strategy
please refer to page 26). Colleagues can raise concerns
through traditional escalation processes via their manager,
through the SD Voice, through the designated NED for
colleague engagement, or by using our whistleblowing line.
A forum for female leaders in the business meets regularly
and escalates any concerns to the Executive Committee.
An Employee Assistance Helpline is in place – a free and
confidential service which offers advice and information.
Pulse Surveys offer a further opportunity to express opinions
on Group policies or practices, or to simply feed back views
to the Executive Team. We operate an independent and
confidential whistleblowing line, Safecall, so that colleagues
can report unethical behaviour on an anonymous basis.
Board/Committee
member
Peter Sjölander
Julian Dunkerton
Shaun Wills
Faisal Galaria
Georgina Harvey
Alastair Miller
Helen Weir
Operational
Financial
Retail
Branding
& Marketing
Risk
Sustainability
Digital
Expertise
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
87
Superdry plc Annual Report 2021 Governance → Corporate Governance Report
Division of responsibilities
The Superdry Board is led by the Chair, and, with the
support of the Company Secretary, they ensure that the
Board receives the right level of information about the
operations and performance of the Group in advance of
meetings, to allow the Directors to discharge their duties
fully. The Chair ensures that Board meetings are a forum
for open and constructive debate and that decisions are
reached by group consensus. Each of our NEDs, including
the Chair, was considered by the Board to be independent
on appointment (for further information on independence,
please see below); and each NED continues to be considered
independent by the Board. There is a clear division of
responsibilities between Executives and NEDs. During FY21,
due to the Covid-19 pandemic, the NEDs have devoted an
exceptional amount of additional time to Superdry, beyond
the requirements of their service contracts.
Composition, succession and evaluation
As detailed in the Nomination Committee Report on page 93,
a process is in place for the appointment of new Directors to
the Board. Candidates are examined to ensure that the skills,
knowledge and experience they have will balance those that
are already in place. Succession plans are reviewed by the
Nomination Committee at regular intervals, and a component
of our strategy is to nurture talent from within, wherever we
can. The Board considers length of service on an annual
basis, prior to sending out notice of its AGM. An annual
Board performance review is undertaken and externally
facilitated every three years. Composition, diversity, how
effectively the Board works together and the effectiveness
of each Director’s individual contribution are assessed. A
Board Diversity and Inclusion Policy is in place. Further
information can be found in the Nomination Committee
Report on page 93.
Audit, risk management and internal control
Responsibility for the oversight of the internal and external
audit functions and their independence is delegated by
the Board to the Audit Committee. Full information about
the responsibilities and the work of that Committee can be
found in the Audit Committee Report on page 97. Formal and
transparent processes are in place to ensure the integrity of
the financial statements, and the Board reviews the annual
financial report to ensure that it presents a fair, balanced and
understandable assessment of the Group’s position and
prospects. A Risk Committee is in place and risk management
and internal controls frameworks have been established.
The Group’s principal risks are set out in a risk register,
which is reviewed by the Board and by the Executive
Committee at regular intervals. Superdry’s main Board
and Committee structure is shown on page 90 of this
report. Further information about our risks and how they
are managed can be found on page 56.
Remuneration
A Remuneration Committee, whose membership is made up
entirely of independent NEDs, is in place. The Group has a
Remuneration Policy, which is reviewed every three years in
consultation with our largest shareholders and with investor
advisory agencies. The policy is set before shareholders for
approval at our AGM. Full details of our Remuneration Policy,
our procedures for developing our policy on Executive
remuneration, and this year’s consultation, can be found
in the Directors’ Remuneration Report (DRR) on page 104.
The DRR also includes details of how we align remuneration
to the Group’s purpose and values, and how we link
remuneration to the successful delivery of our long-term
strategy. No Director is involved in deciding their own
remuneration outcome. The full terms of reference
for the Remuneration Committee can be found
at corporate.superdry.com.
Our Board, governance framework and
activities in FY21
The Board has collective responsibility for promoting
the long-term sustainable success of the Group for all
stakeholders, and for ensuring that effective governance
processes and frameworks are in place.
For full biographical details of our Board members and the
Committees they serve on, please refer to page 84.
Board diversity information
Ethnic diversity
White
British 5
Females 2
White
Swedish 1
Asian
British 1
Gender diversity
Males 5
88
Superdry plc Annual Report 2021 Governance → Corporate Governance Report
Board meeting attendance
The Board held 10 scheduled meetings in FY21 – the attendance of Board and Committee members is set out in the table
below. The Chair ensures that regular meetings are held with the NEDs, without the presence of the Executive Directors.
Board and Committee meetings attendance table
Board/Committee member
Peter Sjölander
Julian Dunkerton
Shaun Wills
Faisal Galaria
Georgina Harvey
Alastair Miller
Helen Weir
Board/Committee member
Peter Williams
Nick Gresham
Member since
29 April 2021
2 April 2019
26 April 2021
29 July 2019
29 July 2019
11 July 2019
11 July 2019
Board
No. of scheduled
meetings attended
Audit Committee
No. of scheduled
meetings attended
Nomination Committee
No. of scheduled
meetings attended
Remuneration
Committee
No. of scheduled
meetings attended
0/0
10/10
0/0
10/10
10/10
10/10
10/10
N/A
N/A
N/A
6/6
6/6
6/6
6/6
0/0
N/A
N/A
7/7
7/7
7/7
7/7
N/A
N/A
N/A
7/7
7/7
7/7
7/7
Resigned on
29 April 2021
15 October 2020
Board
No. of scheduled
meetings attended
Audit Committee
No. of scheduled
meetings attended
Nomination Committee
No. of scheduled
meetings attended
10/10
5/5
N/A
N/A
7/7
N/A
Remuneration
Committee
No. of scheduled
meetings attended
N/A
N/A
Superdry has a corporate governance framework with defined
responsibilities and accountabilities. The Board has delegated
specific responsibilities to its committees – terms of reference
for the Audit, Nomination and Remuneration Committees are
reviewed by the Board on an annual basis and, in FY21, were
completely revised. Each Committee is chaired by a different
independent NED. The Board maintains a schedule of matters
reserved, which is reviewed annually. Matters reserved for the
Board include long-term strategic plans, capital expenditure
over a certain level, budgets, and approval of financial results
and dividends. The duties of the Chair and Senior Independent
Director are set out in documents which are reviewed
regularly. All documents and terms of reference are
available at corporate.superdry.com.
Responsibility for the day-to-day running of the Group
is delegated to the CEO who, in turn, delegates certain
responsibilities to the COO and to business area heads
through the Executive Committee. To ensure that decisions
are taken at the right level and to reduce business and
operational risk, a Delegation of Authority (DoA) matrix is in
use, which clearly sets out the authorities given to individuals
in the business. The DoA is reviewed regularly to ensure it
remains relevant to Superdry’s structure and activities.
Agendas for scheduled Board meetings are discussed
and agreed by the Chair, CEO and CFO with the Company
Secretary several weeks in advance of each meeting and
contain standing items to ensure that reporting is balanced
and consistent: these include Committee reports, the CEO
report, Finance reports (including management accounts
and capital expenditure plans), Investor Relations, Legal
and Governance and Health and Safety. Board papers are
circulated five working days in advance of meetings to
allow adequate time for review and preparation. A level
of information is contained in Board packs that allows
consideration of strategic matters, whilst not over-burdening
the Board with an unnecessary level of detail on operational
or ‘business as usual’ matters.
Where Directors are not able to attend part of any Board
or Committee meeting, they will have reviewed the papers
circulated for that meeting and will have provided comments
to either the Senior Independent Director or the Company
Secretary. All Directors attended each scheduled Board
meeting in FY21.
Following meetings, the minutes are drafted and
circulated within one week and an action list is circulated
with designated owners and specific time frames, for the
completion of actions.
Governance calendars are used for Board and Committee
meetings to ensure that items are reviewed at appropriate
times in the year, and care is taken by the Chair and the
Company Secretary to ensure that sufficient time is allowed
for the discussion of agenda items, including stakeholder
perspectives. Strategic and business area ‘deep dives’ are
undertaken. For further information on the Board’s activities
and discussions in FY21, please see below.
Members of the Executive Team are invited to attend Board
meetings to allow for more in-depth presentations and
question and answer sessions. The table below highlights
such occasions during FY21, although it should be noted that
presentations were also given by Executive Team members
at strategy days during FY21 (see below). Further details of
our Executive Team can be found on the Leadership section
at corporate.superdry.com.
89
Superdry plc Annual Report 2021 Governance → Corporate Governance Report
SUPERDRY GOVERNANCE FRAMEWORK
SUPERDRY PLC BOARD OF DIRECTORS
ALLOTMENT
COMMITTEE
AUDIT
COMMITTEE
NOMINATION
COMMITTEE
REMUNERATION
COMMITTEE
TECHNOLOGY
COMMITTEE
COLLEAGUE ENGAGEMENT
FORUMS AND FEEDBACK
MECHANISMS
Mechanisms include:
• Superdry Voice
• Female Leadership Forum
• Diversity and Inclusion Forum
• ‘Pulse’ Surveys
• Workplace
• Board and Committee
reports and papers
identifying stakeholder
perspectives
RISK COMMITTEE
Membership includes:
EXECUTIVE COMMITTEE
Membership includes:
• CFO
• Head of Risk Management
and Internal Audit
• Group General Counsel and
Company Secretary
HEALTH AND SAFETY
COMMITTEE
Membership includes:
• CFO
• Head of Risk Management
and Internal Audit
• Group General Counsel
and Company Secretary
• CEO
• CFO
• Group General Counsel
and Company Secretary
• HR Director
• Heads of business areas
INCIDENT
MANAGEMENT TEAM
Membership includes:
• Executive Committee
members
(convenes as necessary)
Name of attendee
Role
‘Deep dive’
Phil Dickinson
Creative Director
Autumn/Winter 2020 range update
Jon Wragg
Wholesale and Ecommerce Director
Ecommerce
Date
6 July 2020
6 July 2020
Shaun Packe
Gordon Knox
Global Sourcing and
Sustainability Director
Sustainability strategy
10 August 2020
Business Transformation and
Logistics Director
Information Technology and
Information Security
18 September 2020
11 November 2020
11 November 2020
11 November 2020
Craig McGregor
Retail Director
Guy Youll
HR Director
Ruth Daniels
Group General Counsel and
Company Secretary
Guy Youll
HR Director
Shaun Packe
Global Sourcing and
Sustainability Director
Phil Dickinson
Creative Director
Retail channels strategy
Colleague engagement
Grow Future Thinking
Justin Lodge
Chief Marketing Officer
Marketing strategy
Guy Youll
HR Director
Colleague engagement
28 January 2021
24 March 2021
Justin Lodge
Chief Marketing Officer
Technology and Digital strategic roadmap
24 March 2021
Gordon Knox
Business Transformation and
Logistics Director
90
Superdry plc Annual Report 2021 Governance → Corporate Governance Report
Board activities and discussions in FY21 and early FY22
Activity/Discussions
COVID-19 RESPONSE
Additional Board update meetings were held throughout FY21 to monitor the Group’s response to
Covid-19 – please refer to page 20 for further information.
Meeting in FY21
Throughout
STRATEGY DEVELOPMENT AND APPROVAL – BOARD STRATEGY DAYS
Three Board and Executive Committee strategy days, at which the Executive Team shared their
strategic vision with the Board, took place in FY21. Executive Committee members presented
detailed proposals for their business areas. The Board provided objective feedback and challenge
at these sessions to help to guide the strategy. In April 2021, the Executive Committee presented
the final strategy to the Board – please refer to page 26, where the strategy is set out.
Three dedicated
Board and Executive
Committee strategy
days on 14 October,
29 January and 28 April
DIVERSITY AND INCLUSION
The Board has oversight of diversity and inclusion matters but delegates the consideration of
those matters to the Nomination Committee – please see the Nomination Committee Report on
page 93 for further information. A new Board Diversity and Inclusion Policy was approved in FY21.
SUSTAINABILITY
The Board considered a presentation on ‘Grow Future Thinking’, an initiative to drive positive
change throughout Superdry. Please refer to ‘Our People’ on page 48 for further information.
INVESTOR ENGAGEMENT
The Group’s corporate brokers attended a meeting to update the Board on investor activity
and on the perception of Superdry by investors and analysts. An investor consultation on our
Remuneration Policy was also carried out in April and May 2021 – please refer to the Directors’
Remuneration Report on page 104 for further information.
MEDIA
The Group’s media relations advisers attended a Board meeting to present on Superdry’s media
relations and impact, including strengths, any weaknesses, and opportunities.
COLLEAGUE ENGAGEMENT
The SD Voice presented to the Board – representatives from Head Office and from our stores
presented on their top priorities, on the impact of Covid-19 on colleagues, and on the methods
of communication used to ensure that the SD Voice is truly representative of all colleagues.
BOARD RESIGNATIONS AND APPOINTMENTS
The Board considered and approved the appointment of Julian Dunkerton as permanent CEO and
the appointment of Silvana Bonello as COO. Peter Williams announced his intention to step down
as Chair in April 2021.
22 October
11 November
11 November
11 November
24 March
15 December
APPOINTMENT OF NEW CHAIR AND CHIEF FINANCIAL OFFICER
The Board considered and approved the appointment of a new Chair, Peter Sjölander, and CFO,
Shaun Wills.
9 April
FIVE-YEAR PLAN AND FY22 BUDGET
The Group’s Five-Year Plan and the FY22 Budget were presented to the Board, considered
and approved.
28 and 29 April
FULL-YEAR AND HALF-YEAR RESULTS AND TRADING UPDATES
The Board discussed Christmas and January sales trading results and considered the content of
a trading update in early January.
The Board considered its half-year results, preliminary results and this Annual Report.
7 January
18 January
15 September
Other governance matters
Non-Executive Director independence and
time commitments
Our Board consists of five independent Non-Executive Directors
(Georgina Harvey, Faisal Galaria, Alastair Miller, Peter Sjölander
and Helen Weir) and two Executive Directors (Julian Dunkerton
and Shaun Wills). Peter Sjölander was considered by the Board
to be independent on his appointment on 29 April 2021 and is still
considered by the Board to be independent. The independence
of the NEDs is reviewed on an annual basis and was reviewed in
FY21 as part of the Board performance review (see below for
more information). The time commitments and performance of the
NEDs are also reviewed as part of that process; service contracts
clearly set out the anticipated time commitments of their roles.
Further terms ensure that the Chair and NEDs continue to meet
the requirements of the Code. No NED has exceeded the
maximum nine-year term of service noted in the Code.
The Board considers that each of its NEDs continues to dedicate
sufficient time to their roles. During FY21, due to the impact on
the Group of the Covid-19 pandemic and to the time spent by
the Board on developing strategy, the NEDs spent significant
additional time on their Board duties, far exceeding the
requirements of their service contracts.
91
Superdry plc Annual Report 2021 Governance → Corporate Governance Report
Time commitments of the Chair of the Board
Peter Williams was Chair of the Board during FY21, stepping
down on 29 April 2021. In addition to his role as Chair of Superdry
plc, Peter was also Chair of U and I Group plc and of DP Eurasia
N.V. From his appointment on 2 April 2019, Peter Williams
demonstrated great commitment to his duties as Chair, in
terms of the time he dedicated to the work of the Board
and its Committees and working alongside the Executive
Committee at Superdry.
Peter Sjölander was appointed Chair on 29 April 2021. Prior
to that appointment, the Company Secretary explained to
him the likely time commitments of the role, and his existing
commitments were reviewed by the Board to ensure he would
be able to dedicate sufficient time to his duties. Please refer to
the Board biographies section on page 84 for details of Peter
Sjölander’s other commitments.
Directors’ conflicts
The Board has established formal procedures for the declaration,
review and authorisation of any conflicts of interest of Board
members. The Board is satisfied that none of the Directors
had any conflicts of interest during FY21 which could not
be authorised by the Board.
Directors’ indemnity insurance
We maintain Directors’ and Officers’ Liability Insurance which
provides appropriate cover for any legal action brought against
our Directors and/or officers. In accordance with section 236
of the Companies Act 2006, qualifying third party indemnity
provisions are in place for all directors of Group companies, in
respect of liabilities incurred as a result of their office, as far as
is permitted by the law.
Board performance review and objective setting
A performance review of the Board is completed every year,
with an externally facilitated review carried out at least every
three years. An externally facilitated review was carried out in
March 2020 and an internally facilitated review was completed
in March 2021 by the Company Secretary. The review was
carried out using a questionnaire-based analysis, assessing
the effectiveness of the Board’s decision-making processes,
dynamics and relationships. The Board and each Committee
were reviewed – questions on induction, strategy days,
composition, diversity, training, time management and
Board effectiveness were included.
The results of the FY21 Board performance review were positive,
acknowledging the challenge, value and support the Board had
given during the previous year. A number of objectives for FY22
have been agreed with the key focus being on the following:
• Technology – oversee, through the Technology Committee,
the effective delivery and implementation of the
technology roadmap.
• Engagement – ensure Board members have ongoing
engagement with Superdry colleagues to enhance the Board’s
understanding of colleague sentiment, culture and values.
• Diversity and Inclusion – actively monitor Superdry’s diversity
and inclusion targets and hold management to account for
building a diverse, inclusive and respectful culture.
• Further consideration of Board composition and succession
during FY22.
Risk management and internal controls
The Board confirms that there are processes for identifying
and mitigating risks and a system of internal financial and
non-financial controls. For a description of our systems for
risk management, please turn to ‘How We Manage Our Risks’
on page 56. For further information on our internal controls
framework and the ongoing work to ensure it is robust,
please refer to the Audit Committee Report on page 97.
Whistleblowing arrangements
The Group operates an independent and confidential, global
whistleblowing service for the reporting of unethical conduct.
For further information, please refer to page 103.
Re-election of Directors and AGM
At the AGM, all Directors will offer themselves for re-election.
We consider the Directors offering themselves for re-election to
be effective, committed to their roles and to have sufficient time
available to perform their duties. For further information on the
specific reasons why each Director’s contribution is important
to the Group’s long-term sustainable success, please refer
to pages 84 and 85.
Our AGM will take place on 22 October at 10.00am. The notice
of the meeting can be found on page 202 and is also available at
corporate.superdry.com. The Directors consider that each of the
proposed resolutions in that notice are in the best interests of the
Group and shareholders. The resolutions are put to a poll, rather
than a show of hands, to ensure that the votes of all shareholders
are counted, even if they cannot attend in person. Proxy forms
allow for three-way voting. All Board members attend the AGM
and are available to answer questions during the meeting or to
discuss matters more informally following the meeting, subject
to any restrictions that may arise from the ongoing impact
of Covid-19.
Approved and signed on behalf of the Board
• Strategy – monitor the implementation of the Five-Year Plan,
focusing on key deliverables and on holding the CEO, CFO and
Executive Team accountable for its delivery, ensuring there is
an appropriate governance framework that underpins it.
Ruth Daniels
Company Secretary
15 September 2021
92
Superdry plc Annual Report 2021 Governance → Nomination Committee Report
Nomination Committee Report
Introduction from the new Chair
Committee activities in FY21
Performance, talent and succession planning
In April 2020, the Committee reviewed and discussed individual
performance at Executive Committee level, existing talent at
Superdry, and succession planning needs for the Executive
and Senior Leadership Teams. The agreement of short-term
goals for the Group and the development of a long-term
strategic plan had identified several areas where important
skills or experience were needed to meet specific aims. The
Committee identified the need for a Chief Operating Officer,
for further digital capabilities, including a Chief Marketing
Officer, as well as the ongoing need to recruit a permanent
Head of Information Technology.
In July 2020, Justin Lodge was appointed Chief Marketing
Officer, with a brief to review and modernise our marketing
platforms, in line with one of our short-term strategic aims.
Executive Director and then CFO, Nick Gresham, left
Superdry in October 2020 and the search for an interim CFO
was concluded with the appointment of Benedict Smith in
November 2020. Benedict oversaw the successful delivery
of the half-year results, providing strong and detailed interim
leadership to our Finance function. Following an extensive
recruitment process, in which candidates for the CFO role
were reviewed and discussed by the Committee and
interviews held, Shaun Wills was appointed to the Board
as an Executive Director and as CFO in April 2021.
Throughout the Autumn of 2020, the Committee, in
conjunction with senior leadership, discussed the need to
strengthen the Finance function at Superdry – please
refer to the Audit Committee Report on page 97 for
further details.
In November 2020, the Committee reviewed the Executive
Committee structure and the business objectives set for the
CEO, including KPIs. CEO objectives are cascaded to the
Executive Committee, with personal objectives put in place
for each member, to support the CEO and both the short
and long-term strategy.
At its meeting in March 2021 the Committee reviewed
the Executive Committee structure, composition and
performance, and recommended that 360-degree analysis
tools be used as part of individual performance reviews.
New Chair appointment
In December 2020, Chair, Peter Williams announced his
decision to step down from the Board. At the same time,
two further key changes to Superdry’s leadership were
announced – the appointment of Julian Dunkerton as
permanent Chief Executive Officer and the appointment
of Silvana Bonello as Chief Operating Officer.
The Nomination Committee led the process for
the recruitment of a new Chair, which resulted in the
appointment of Peter Sjölander in April 2021. Specific
skills which Peter brings to the Board include international
exposure and brand transformation, as well as significant
experience in chairing growing digital brands.
Dear Shareholders
Welcome to my first report as Nomination Committee Chair.
I would like to thank former Chair, Peter Williams, who
stepped down from the Board at the start of FY22, for his
work with the Committee from April 2019 to April 2021.
During FY21, the Committee continued to strengthen the
Executive Team with individuals possessing the necessary
skills and experience to deliver short-term performance
goals and who would play their part in the development of
our longer-term strategy. Further information on this can
be found in the Committee activities section of this report,
below, and in the Strategic Report from page 4.
“During FY21, the Nomination
Committee continued to strengthen the
Executive leadership with individuals
possessing the necessary skills and
experience to deliver short-term
performance goals and who would
play their part in the development
of our longer-term strategy.”
Diversity and inclusion are very important to us and this
year, the Committee spent considerable time reviewing
and updating our Board policy on diversity and inclusion –
please refer to the Board Diversity and Inclusion Policy
section opposite.
93
Superdry plc Annual Report 2021 Governance → Nomination Committee Report
Membership and attendance
The Nomination Committee was composed in FY21 of the
NEDs of Superdry plc and was chaired by Peter Williams,
who stepped down on 29 April 2021, when Peter Sjölander
was appointed as Board Chair and as Nomination Committee
Chair. The Committee held seven scheduled meetings in
FY21, and all members attended each meeting. Regular
attendees at meetings included the Group HR Director,
the Group Company Secretary and General Counsel, and
the Deputy Company Secretary. The role of secretary
was performed by the Group Company Secretary or
their nominee. A report of the Committee’s activities
is given to the Board at each of its scheduled meetings.
Composition and responsibilities
The Committee leads on the process for new appointments
to the Board and to the Executive Committee at Superdry
and ensures that those appointed have the required skills
and experience to support the development of the
Group’s strategy.
The Committee regularly reviews the composition of the
Board and Executive Team, taking into consideration the
range and balance of skills, experience and knowledge. The
Committee reviews and monitors diversity and inclusion
throughout Superdry and formally reviews the diversity of
the Board and its Committees on an annual basis, as part
of the annual performance review. The Committee makes
recommendations for change where appropriate and keeps
under review the succession needs of the Board and of the
leadership team at Superdry, considering the challenges
and opportunities facing the Group, to ensure it
remains competitive.
The Committee ensures that appropriate procedures are
in place to enable the nomination, induction, training
and evaluation of Board Directors and members of the
Senior Leadership Team. The full terms of reference
for the Nomination Committee can be found at
corporate.superdry.com.
For further information on the skills and experience of the
Committee members, please refer to the biographies on
pages 84 to 85 in the Corporate Governance Report.
Prior to joining the Board, the time commitments and
independence of potential NEDs are scrutinised to ensure
that they have sufficient time to fully discharge their duties.
The Committee keeps the time commitments, including
other positions held by Board members, under review to
ensure that each Director continues to have sufficient
time to discharge their duties effectively.
Tenure of Board members is regularly reviewed by the
Committee – each member of the current Board was
appointed in FY20, apart from Peter Sjölander, who
was appointed at the start of FY22.
Colleague engagement
The results of two colleague engagement surveys (Pulse
Surveys) on Diversity and Inclusion (in August 2020) and
on Well-being (in November 2020) were reviewed by
the Committee. Both surveys led to the development of
action plans for implementation throughout the business
to address any concerns raised by colleagues. Please
refer to ‘Our People’ on page 48 for more information about
colleague engagement, including the work of the SD Voice,
and to our Section 172 Statement on page 68 for information
about colleagues as a stakeholder group.
Terms of reference
The Committee reviewed and adopted new terms of
reference in January 2021. The Committee also reviewed
its own standing agenda, which is based on a governance
calendar followed by the Board and the Committees, at
each scheduled meeting.
The Committee also reviewed, in March 2021, its own
progress on the objectives set following the Board
performance review in March 2020. Good progress on
several objectives had been made, including training, the
development of strategy at Board and Executive strategy
days, and the development of KPIs to monitor the
achievement of business objectives.
Board Diversity and Inclusion Policy
In April 2020, the Committee reviewed a revised
Board Diversity and Inclusion Policy and made several
recommendations for changes. The Executive Team
was asked to review the Group’s diversity and inclusion
policies and arrangements and to consider how they could
be changed to make Superdry, and particularly Head Office,
a more diverse environment. The Committee reviewed a
further revised Board Diversity and Inclusion Policy at its
meeting in July 2020 but agreed, considering the recent
‘Black Lives Matter’ campaign, that the Policy was not
progressive enough and that further work needed to be
done, including stronger commitments to improve ethnic
diversity at Superdry, the gathering and monitoring of
ethnicity data, and the establishment of gender and ethnic
minority recruitment targets beyond those already in place
for the Board. It was also agreed that consultation on this
subject was necessary to understand the views of
Superdry colleagues.
Our Pulse Survey in August 2020 on Diversity and
Inclusion found that most colleagues at Superdry felt
positive about our work environment and the ability for them
to be themselves at work, but there was negative feedback
about the internal and external response to the ‘Black Lives
Matter’ campaign, and about commitments by Superdry to
94
Superdry plc Annual Report 2021 Governance → Nomination Committee Report
visibly improve diversity, particularly in leadership roles.
Following this feedback, a set of diversity and inclusion
commitments were agreed by the Executive Committee and
published internally, and an action plan was put in place. The
action points included the extension of gender and ethnic
diversity recruitment targets that were already in place at
Board level, to Executive Committee and senior leadership
levels, and a partnership with the Music of Black Origin
(MOBO) awards.
The Committee approved a revised Board Diversity and
Inclusion Policy in October 2020. Colleague diversity data
is now collected, and a diversity focus group has been
established. The group has met to discuss diversity and
inclusion at Superdry, including personal perspectives
and experiences at work.
In March 2021, an update was presented to the Committee
on progress made on diversity and inclusion objectives
and targets. Please turn to ‘Our People’ on page 48 for
further details.
Board Diversity and Inclusion Policy Statement
The Board believes that it is vital to have a fully diverse and
inclusive Board, comprising Directors with a mix of skills,
knowledge, experience, backgrounds, gender, age, ethnicity
and other characteristics. It is the Board’s strong belief that
a diverse Board with different perspectives, insights and
viewpoints promotes improved decision-making and
ultimately benefits Superdry’s stakeholders through a
long-term sustainable business. The Board understands that
supporting our workforce in a culture of trust and respect
is essential to the success of Superdry, where colleagues
feel valued and rewarded for the work they do. The tone
for diversity and inclusion across the organisation is set
from the top and the Board believes that having a diverse
leadership team and an open and inclusive culture form part
of Superdry’s core values. We believe there is strength in
difference. All appointments to the Board are made on merit
against a set of objective criteria, in the context of the skills,
experience, independence and knowledge which the Board
requires to be effective.
The Board fully supports the Hampton-Alexander
Review targets to increase the number of women in senior
leadership positions in FTSE companies. The Board also
supports and is aligned with the recommendations of the
Parker Review, which aims to improve ethnic diversity on
FTSE boards. Superdry’s present Board composition for
minority ethnic communities is 14% and the percentage
of women on our Board is 29%.
Please also refer to our reporting on page 52 and
at corporate.superdry.com.
Process for Board and Executive
Committee appointments
There is a formal and robust process for the appointment
of new Directors to the Board. Candidate profiles are drawn
up by the Committee, the Group HR Director and, where
appropriate, the CEO, and long lists are prepared, often
with the assistance of specialist search agencies. Under the
instruction of the Committee, all external search agencies
used in FY21 were scrutinised for their ability to deliver a
diverse range of candidates. Initial interviews are conducted
by the Chair of the Board (where appropriate) and Group HR
Director and suitable candidates are shortlisted for longer,
in-depth interviews that may include Committee members
and/or the CEO. Candidates are scrutinised to ensure that
they have sufficient time to dedicate themselves to the role
and their relevant skills, knowledge and experiences are
weighed up against those already in place. Once the best
overall candidate has been identified, a recommendation
is made by the Committee to the Board, which has
responsibility for all Board appointments.
A similar process is followed for appointments to the
Executive Committee, whereby candidate long lists
are drawn up by the Group HR Director, often with the
assistance of specialist search agencies. Interviews are then
conducted by the Group HR Director and CEO. Shortlisted
candidates are interviewed by a panel which may include
other members of the Executive Committee and/or members
of the Nomination Committee. A proposal is made to the
Nomination Committee, which has responsibility for approving
all appointments to the Executive Committee, to allow it to
maintain oversight over all senior level appointments.
External search agencies used during FY21 were Heidrick
and Struggles, Korn Ferry, Odgers Berndtson and The
Up Group.
Where prospective Board and Executive Committee
candidates are of equal merit, the Committee will advocate
the selection of candidates that will increase diversity
at Superdry. The establishment of gender and ethnicity
diversity targets and the wider commitments on diversity
and inclusion outlined earlier in this report, driven by the
Board’s Diversity and Inclusion Policy, help to support
a diverse pipeline of candidates. However, we are aware
that our work in this area is by no means complete and the
Committee will continue to closely monitor diversity and
inclusion targets and to find ways to improve diversity on the
Board, the Executive Committee and throughout Superdry.
Board composition and succession planning
Board and Executive succession planning aims to ensure
that the Board and senior leadership at Superdry have the
optimal blend of skills, commercial experience, diversity and
tenure. Appointments are based on merit, keeping in mind
the needs of the Group, the desire to acquire new skills and
the Board’s focus on creating a more diverse environment.
95
Superdry plc Annual Report 2021 Governance → Nomination Committee Report
The Committee, together with the CEO and Group HR
Director, regularly reviews the existing and future needs of
the business and promotes the appointment of candidates
which will increase diversity at Superdry.
The Committee reviewed the organisational structure,
talent management and succession plans of the Group at its
meeting in April 2020 and approved several objectives and
actions to ensure that effective succession plans were in
place – please see ‘Committee activities in FY21 and early
FY22’, above. The Committee was scheduled to review the
organisation’s succession plans again in April 2021; however,
due to Board and Committee membership changes and the
recent finalisation of the strategy in April 2021, it was agreed
to carry out this review at a time appropriate for the
business, during FY22. Succession planning needs
will be considered in line with our strategic aims.
Induction, training and continuing development
During FY21, the Nomination Committee, in conjunction with
the General Counsel and Company Secretary, oversaw the
arrangement of Directors’ training in relation to Directors’
duties and liabilities and on Directors’ and officers’
insurance. A plan for training and continuing development
for FY22 has been agreed with the Board.
Induction plans were prepared for new Board Directors,
Shaun Wills and Peter Sjölander, including the provision of
materials relating to the constitution, corporate structure
and history of the Group, Directors’ duties, the organisational
structure of the Group and reports relating to previous
results and to future strategy. Meetings with fellow
Board and Executive Team members were facilitated and,
where appropriate, meetings with internal and external
stakeholders and partners were arranged. The Covid-19
pandemic made the timing of the usual tours of stores, Head
Office and distribution centres difficult, and these will take
place over the course of FY22, as and when conditions allow.
Board and Committee annual
performance review
In April 2020, following an externally facilitated Board
and Committee performance review in March 2020, the
Committee met to discuss the findings of that review and to
set itself objectives for FY21. An internally facilitated Board
and Committee evaluation took place in March 2021. Please
refer to page 92 in the Corporate Governance Report for
details of these reviews, including outcomes and objectives
set by the Committee for FY22. Board composition and
diversity is reviewed as part of the annual performance
review, as well as Board dynamics and relationships.
The Committee will use the results of this year’s review to
inform discussions on Board composition, skills, diversity
and dynamics in FY22.
Annual re-election of Directors
As required by the Code, each Director offers themselves up
for re-election at the AGM. The Committee considered each
Director’s tenure, performance (including contribution to the
activity of the Board and its meetings), independence and
other external commitments to ensure that each Director
continues to fulfil their responsibilities to Superdry plc.
Peter Sjölander
Nomination Committee Chair
15 September 2021
96
Superdry plc Annual Report 2021 Governance → Audit Committee Report
Audit Committee Report
FY21 has witnessed the continued impact of the Covid-19
pandemic and ongoing uncertainty about Brexit. Further
national and global lockdowns led to a significant number of
adjustments to ensure the continued delivery of operations,
with most of the Group’s teams working remotely. Cash
management has taken priority, and applications for multiple
government furlough schemes in the countries in which our
stores are located added further complexity during the
year. The Audit Committee worked with the Nomination
Committee to find and hire an interim CFO and a new
permanent CFO. The ongoing government ‘stay at home’
measures, resulting in a continuation of remote working
arrangements, has created additional challenges for the
teams working on our financial results.
“During FY21, the Committee has
continued to focus on strengthening
internal controls and monitoring risk in
a year that has witnessed the continued
impact of the Covid-19 pandemic and
ongoing uncertainty about Brexit.”
An examination of the full financial impact of the continuing
Covid-19 pandemic on Superdry can be found in the
Strategic Report section on page 20. The ways in which the
pandemic has impacted our risks can be found in the ‘How
We Manage Our Risks’ section of the report on page 56.
About this Audit Committee Report
This report records the activities of the Committee
throughout FY21 and explains how the Committee has
discharged the responsibilities delegated to it by the Board.
The complete terms of reference for the Audit Committee
were revised and updated by the Committee in FY21 and can
be found at corporate.superdry.com. A summary of the
Committee’s responsibilities can be found below.
Alastair Miller, Chairman of the
Audit Committee
As Chairman of the Audit Committee, I am pleased to
present the Audit Committee Report for the financial year
ended 24 April 2021. This is my second report as Chair
and I would like to take this opportunity to thank my fellow
Committee members, the finance, risk and internal audit
teams at Superdry and our external auditor Deloitte for the
work that has gone into this year’s audit. I would also like to
extend my personal thanks to Benedict Smith, Interim CFO,
for his work on the half-year results and on our review of the
effectiveness of our internal controls.
I would like to start this report by briefly referencing the
FY20 audit, which, as previously documented, was a very
challenging process for everyone involved. Along with a
number of other companies, our FY20 financial results were
delayed to September 2020. Recommendations arising from
that audit were taken forward by the Committee and by the
Finance team into FY21, including increasing resource and
resilience in our Finance function and improving our internal
financial controls. Whilst progress has been made, this
remains an ongoing programme and that has been reflected
in the duration of the FY21 close process. I invite you to read
about this work on page 101 in this report.
During FY21, we continued work that commenced at the
end of FY20 to secure our credit facilities. An Asset Backed
Lending Agreement was put in place in August 2020 –
further information about this can be found later in this
report on page 100.
97
Superdry plc Annual Report 2021 Governance → Audit Committee Report
Principal roles and responsibilities
The Audit Committee:
• monitors the integrity of the Group’s annual financial
statements, the half-year report and any formal
announcements relating to the Group’s financial
performance, including reviewing significant financial
reporting judgements. The Committee receives regular
reports from the Group’s external auditor;
• reviews and challenges significant accounting policies,
whether the Group has followed appropriate accounting
standards and the clarity and completeness of financial
disclosures, including in relation to critical accounting
judgements and estimates;
• reviews information in the financial statements relating
to risk management and audit and keeps under review the
effectiveness of the internal audit function, the systems of
internal controls and the frameworks for risk management.
The Committee provides oversight of the Group’s Risk
Committee. The Committee ensures that the Group’s
internal audit function is adequately resourced;
• provides advice, when requested by the Board, on whether
the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Group’s financial position
and performance, business model and strategy;
• reviews and monitors the independence of the
external auditor and the objectivity and effectiveness
of the external audit process and the audit plan. The
Committee ensures that the provision of non-audit
services by the external auditor does not impair its
independence or objectivity. The Committee recommends
the appointment of the external auditor to the Board; and
• reviews the Group’s whistleblowing arrangements on an
annual basis.
Committee membership
The Committee consists of the independent Non-Executive
Directors (but not the Board Chair).
The biographies of Committee members (all of whom
are independent Non-Executive Directors) can be found on
pages 84 and 85 of this report. As required by the Code, at
least two members of the Committee are considered by the
Board to have competence in accounting and all members
have recent and relevant financial experience, alongside
significant retail sector expertise.
Committee meetings and attendance in FY21
There were six scheduled Audit Committee meetings
during FY21, and each Committee member attended each
Committee meeting. Representatives of the external auditor
attended each meeting. The Chair of the Board, CEO,
CFO (or interim CFO) and Head of Internal Audit, Risk
Management and Business Continuity also attended
each meeting. The Company Secretary or their nominee
attended each meeting to record the minutes.
The Committee’s meetings follow a standing agenda which
covers the key Audit Committee areas of oversight
according to its terms of reference: financial information,
external audit, internal audit, risk management, internal
controls and any other matters which it considers it should
review. The Committee’s work is governed by an annual
calendar, which is reviewed each year.
Full details of the work of the Committee during FY21 can be
found below. This is intended to provide shareholders with
an understanding of the principal matters that were reviewed
and discussed and our schedule of work throughout FY21.
I will be available at our AGM to respond to any questions
about the Committee’s work.
Alastair Miller
Audit Committee Chairman
15 September 2021
How the Audit Committee operated in FY21
Financial reporting
The Committee reviewed and evaluated the appropriateness
of the half-year and full-year financial statements with
management. The full-year financial results were reviewed
with the external auditor. The half-year results were reviewed
by PwC, who were engaged to perform a limited procedures
review, conducted at the Committee’s request. At the
request of the Board, the Committee considered whether the
Annual Report and Accounts, taken as a whole, were fair,
balanced and understandable and whether they provided
the information necessary for shareholders to assess the
Group’s financial position and performance, business model
and strategy.
The Committee discussed the critical accounting policies,
assumptions and estimates, including key accounting
judgements, concluding that those estimates, assumptions
and judgements were reasonable based on the information
available. The Committee reviewed the going concern and
viability of the Group over the longer term, as part of its
assessment of the Group’s risk. The Committee’s work in
FY21 focused on key accounting judgements and a range of
matters, as set out in ‘The Committee’s work in FY21’ below.
Key accounting judgements
Fixed asset impairment
The Committee reviewed and challenged management’s
determination, in line with IAS 36, that the continuing
impact of Covid-19, and the further lockdowns across the
UK and Europe throughout the financial year, constituted a
‘triggering’ event for assessing the potential impairment of
property, plant and equipment (PPE) and right-of-use assets
of the store cash generating units. The Committee also
98
Superdry plc Annual Report 2021 Governance → Audit Committee Report
considered management’s approach to the impairment
review with a focus on the allocation of the medium-term
financial plan across the store portfolio, and the judgement
to assume no lease extensions in determining the forecast
store cash flows. The Committee considered the
methodologies, sensitivities and assumptions used in
the modelling of the impairment assessment adopted
by management. This included challenging the projected
cash flows, long-term growth rates and discount rates used.
Inventory
The Committee monitored and reviewed inventory balances
throughout FY21, noting, notwithstanding the reduction in
inventory across the year, the impact on inventory levels
caused by Covid-19 related lockdowns and store closures.
With more evidence across the year of the impact of
Covid-19 on sales and inventory, a revised approach
was applied to assessing the requirement for any further
inventory provision. The inventory balance was net of a
provision of £9.1m (FY20: £9.8m). This was after a £3.8m
release of the £6.1m Covid-related provision booked
in FY20 against Spring/Summer 20 product following a
better-than-expected recovery, which was broadly offset by
a one-off £4.1m provision in relation to high-end Autumn/
Winter 20 concept product, which had been unsuccessful
(FY20: nil). The Committee reviewed the methodology used
by management to determine the provision required at the
end of FY21.
Debtors and bad debt provisioning
The Committee reviewed the debtor summary, ageing
profiles and the provisions for bad debts to ensure they
remained appropriate, considering the impact of the
Covid-19 pandemic on expected credit losses within
the trade receivables balance and taking account of
performance in the year against last year’s provision and
cash collections post year end. Provision was made for
balances assessed as being uncollectable on a customer-by-
customer basis, having regard to available credit insurance
and any security held by the Group. Further country-specific
related credit risk arising from the impact of Covid-19 related
business interruption on our customers’ business was
assessed by means of rating agencies’ published data and
credit scores. The impact of these two elements was an
overall decrease in the total bad debt provision, primarily
driven by a reduction in specific customer-level provisions.
Returns provision
The provision for sales returns was reviewed with particular
reference to the impact of mandated lockdowns on the
business of the Group’s wholesale partners. Following
increases in the volume of returns since the beginning of the
Covid-19 pandemic, a revised approach was determined for
assessing the year end returns provision. Evidence from the
end of the last two completed seasons (Spring/Summer 20
and Autumn/Winter 2020-2021) was used to inform the
estimate for the year-end provision, as well as analysis of
actual returns after the year-end resulting in a decrease in
the returns provision held, and a corresponding adjustment
to cost of sales and inventory at year-end.
IFRS 16
The Group adopted IFRS 16 during FY20 and continues
to recognise an onerous contract liability for the service
charges element of the rental contracts, which is outside
the scope of the standard. During FY21, due to the Covid-19
pandemic, there has been a significant amount of rent
renegotiation which has been integrated into our IFRS 16
model. The Group has elected to adopt the practical
expedient for Covid-19 related rent concessions for any
rent modifications or renegotiations meeting the recognition
criteria, which allows the Group to recognise rent concessions
within profit or loss rather than treat them as a lease
modification. Covid-19 related IFRS 16 rent concessions
resulted in a credit to profit or loss of £4.0m. IFRS 16 lease
modifications and renegotiations resulted in a further credit
of £14.3m to other gains and losses. New specialist lease
accounting software has been implemented to reduce the
scope for calculation error.
Segmental reporting
The Committee reviewed and challenged management’s
proposal to amend external reporting under IFRS 8 to
recognise three operating segments, as opposed to two in
prior years. The decision was made to separate the Retail
segment into Stores and Ecommerce, to better reflect the
way the business is operated and monitored internally, in
particular following the growth of the Group’s Ecommerce
operations since the start of the Covid-19 pandemic.
The segmental allocation of goodwill was revised on
the same basis.
Going concern and viability
The Committee reviewed and challenged management’s
FY22 Budget and medium-term forecast, including the
detailed assessment of a number of downside scenarios,
predominantly using a reverse stress-test approach. This
review focused on the assumptions made regarding the
impact of the Covid-19 pandemic on the retail sector and
wider economy and specifically to Superdry; and the ability
to execute the turnaround plans required to recover brand
health and return the business to growth.
Following this review, the Committee noted that conditions
had materially improved since last year and that, despite the
impact of the pandemic, the Group had been able to manage
its liquidity effectively and had not needed to draw down on
the ABL facilities put in place last year.
It also agreed with management’s view that the likelihood of
further downsides in revenue, beyond those modelled in the
reverse stress test, that cannot be mitigated adequately, is
remote.
Other matters
Five-Year Plan
The Committee reviewed the updated medium-term
planning assumptions used in the going concern and viability
considerations as well as in the calculations for impairment
and assessments of recoverability of deferred tax assets.
Although there remains a high level of uncertainty as a
result of Covid-19 and the macro economic outlook,
the Committee’s analysis supports the plan adopted.
Internal controls framework review
In FY20, the Group commenced a review of the effectiveness
of its internal controls framework. A number of control
deficiencies were identified and remediation plans
99
Superdry plc Annual Report 2021 Governance → Audit Committee Report
established. The Committee has been regularly updated on
the progress of the remediation project during FY21. Whilst
improvements have been made, progress has not been as
originally planned and this will remain a top priority of the
Committee in FY22. Further details are set out in the ‘Review
of the effectiveness of internal controls’ section below.
Asset Backed Lending Agreement
In August 2020, an Asset Backed Lending Agreement (ABL)
was put in place with banking partners HSBC and BNPP. The
securing of credit facilities upon which to draw, if necessary,
The Committee’s work in FY21 and FY22 to date
Meeting
Matters considered by the Committee
was an important step to ensure short to medium-term
financial stability for the Group, in an uncertain global
economic and social environment. Following the second and
third Covid-19 related lockdowns in the UK and Europe the
Committee reviewed the forecasts on which revised financial
covenants were agreed with the ABL facility banks. The
Committee also made enquiries into the governance and
controls surrounding the operation of the ABL facility,
concluding that those arrangements were working to
the standards required.
April 2020
July 2020
• Key financial judgements update
• The results of an audit of stock variances
• Internal controls framework update
• IT and information security update
• Timetable for the year-end audit process
• External auditor’s full-year audit plan, including materiality
• Private session held with external auditor
• Key financial judgements (year-end update)
• Five-Year Plan
• Internal controls framework update
• Store impairment and onerous contract review
• Whistleblowing arrangements and policy annual review
• Anti-Bribery and Corruption annual review (including Gifts Register)
• Private session held with external auditor
September 2020
• Key financial judgements update
• Report of the external auditor on the FY20 audit, including control deficiencies
• Full-year financial results, Going Concern and Viability statements and recommendations to
December 2020
January 2021
March 2021
the Board
• Fair, balanced and understandable review and recommendation to the Board
• Review and approval of the Audit Committee Report included in the FY20 Annual Report
• Private session held with external auditor
• Key financial judgements update
• ‘Deep dive’ in relation to ethical supplier auditing
• Arrangements for the renewal of the Group’s Directors’ and Officers’ insurance
• Review of Principal Risks and Uncertainties
• Treasury Policy review
• Review of the independence of the external auditor
• Litigation update
• PwC review of half-year results FY21
• Internal controls framework review
• Results of audit of the Group’s response to the Covid-19 pandemic
• Tax Policy annual review
• Key financial judgements update
• External auditor’s full-year audit plan, including materiality, for FY21
• Proposed changes to external reporting for FY21
• Internal Audit update report and plan for FY22
• Review of Principal Risks and Uncertainties
• ‘Covid-Secure’ store audit report
• New Committee terms of reference
• ‘Deep dive’ on inventory shrinkage
July 2021
• Whistleblowing arrangements and policy annual review
• Anti-Bribery and Corruption annual review (including Gifts Register)
August 2021
• The Committee considered this annual financial report, including a fair, balanced and
understandable review, an updated key financial judgements paper, the auditor’s report to
the Committee and the draft preliminary results announcement and presentation to investors.
100
Superdry plc Annual Report 2021 Governance → Audit Committee Report
Committee performance review
An internally facilitated Committee performance review
took place during March 2021 as part of the annual Board
and Committee performance review. I am pleased to report
that the Audit Committee continues to function well. Please
refer to page 92 in the Corporate Governance Report for
further details on the evaluation.
Committee areas of focus for FY22
The embedding of a robust internal controls framework
remains the Committee’s top priority; further details of which
are set out below. Its other main areas of focus for FY22 will
be to monitor any continuing impact of Covid-19, progress
of the deployment of the Group’s technology roadmap and,
towards the end of the financial year, the implementation of
the European Electronic Single Format requirements (ESEF).
That is the need for EU regulated listed companies to
produce their annual reports in eXtensible HyperText
Markup Language (XHTML) for reporting periods beginning
on or after 1 January 2020 and for International Financial
Reporting Standards (IFRS) reporters to use Inline XBRL
(iXBRL) to make the consolidated data in the primary
financial statements machine-readable.
Review of the effectiveness of internal controls
During FY20 a number of accounting and control issues
were identified, including a prior year adjustment relating
to inventory at the half-year. Internal Audit reports also
highlighted several control weaknesses across Credit
Control, Accounts Receivable and within the IT environment.
In response to this, and as detailed in last year’s Audit
Committee Report, the Committee undertook a review of the
Group’s internal control environment commencing in the last
quarter of FY20. To support this review, additional resource
was brought into the finance team. External advisers (PwC)
were also engaged to support the development of an
improved internal control framework. Key risks were mapped
for each core business process, and controls designed to
mitigate those risks. Issues identified in undertaking this
exercise included weaknesses in general IT controls, balance
sheet reconciliations, and the month end financial review
process. The scope and findings from this review were
reported to the Committee.
Deloitte also identified a number of financial control
weaknesses during the FY20 audit, including: management
review controls, balance sheet reconciliations, transactional
processing controls and deficiencies in general IT controls.
These matters were included in Deloitte’s FY20 audit report.
During FY21, PwC were also engaged to support the
Company with the preparation and review of the FY21
half-year financial statements, a process which also
identified a number of control deficiencies. Following this
review, management prioritised these control deficiencies
as part of a revised remediation plan, that included the
issues identified as part of Deloitte’s FY20 audit report.
In the second half of FY21, the Audit Committee and Finance
department prioritised delivering material improvements to
the year-end close process. This included remediating key
balance sheet controls around inventory, accounts payable,
and cash, as well as improving the month-end close and
review processes. To assist with this, the finance function
was significantly strengthened in Q4 FY21 with the addition
of 15 new roles, including an experienced Group Financial
Controller. An Interim Finance Transformation leader has
also been employed to facilitate, document and implement
improved processes. Areas of focus included the Procure
to Pay cycle, including the supplier onboarding process
and enhanced reconciliations of key control accounts.
In addition, a new third party system for recording and
accounting for leases under IFRS 16 was implemented.
During the final quarter of FY21, Internal Audit reviewed
the progress of the Group’s remediation plan that was
initially due to be completed by the end of December 2020.
The review found a number of areas where the control
environment required further improvement, in part due to
the limited time available to embed the changes between
finalising the FY20 full-year audit and the half-year FY21
audit. This was exacerbated by the extensive disruption
and additional work caused by the Covid-19 pandemic.
During the FY21 year-end audit process, further issues
were identified including controls associated with furlough
claimed in the UK and the Group’s IFRS 16 ‘Leases’
accounting. As in FY20, the FY21 results have also
been pushed back to September, to allow for an
effective process whilst the control issue remains.
Although we have seen improvement leading up to the
end of FY21, additional time has been required for the
year-end audit and work remains in terms of optimising and
then embedding improved processes and technologies.
Under new leadership, the Finance department is currently
developing a finance transformation plan, that will provide
timelines, priorities and resource requirements for further
improvement across the internal control framework. The
plan will consider the key recommendations from the BEIS
consultation paper relating to UK Corporate Governance
reforms and be presented to the Audit Committee. The
business has started to introduce technology to automate
manual processes where possible to enhance efficiencies,
accuracy and consistency. There are also planned
enhancements to current systems, including an overdue
upgrade of the current accounting system, CODA. The
process of establishing a fully robust control environment
remain a top priority and we are confident that there will
be material improvements in FY22.
The Audit Committee will be regularly updated on progress
during FY22 and will continue to review the effectiveness
of the programme as it is implemented, together with
any further recommendations in relation to the control
environment, including any further control observations
raised by the FY21 external audit.
101
Superdry plc Annual Report 2021 Governance → Audit Committee Report
Internal audit
The Group’s Internal Audit plan is developed by the Head of
Internal Audit, Risk Management and Business Continuity,
supported by an Internal Audit Manager, and is agreed with
the Audit Committee at the start of each financial year.
During FY21 the Internal Audit team has assisted the Audit
Committee in reviewing the effectiveness of the Group’s
internal control framework. Specifically, the focus has been
on strengthening the controls within accounts payable and
monitoring progress against the agreed remediation plans
as set out above.
The Internal Audit team also carried out specific audits
during FY21 relating to Data Security and the Treasury
function. Following the Group being targeted by spoofing
scams, Internal Audit also carried out an investigation into
controls designed to prevent payments to fraudsters
operating within the Accounts Payable function.
Throughout the financial year, Internal Audit also reviewed
business risk assessments of the operational and financial
impacts of Covid-19, including impacts on teams and team
safeguarding, security of closed locations and maintenance
of supply chain and supported the development of business
continuity and impact mitigation plans.
Detailed reports containing the findings and
recommendations of internal audits are presented to the
Committee along with remediation plans, where necessary.
Remediation actions are communicated to business owners
and are monitored and actively followed up by the Internal
Audit team, through to completion by agreed timescales.
The Internal Audit plan is subject to ongoing review during
the year, so that it is agile enough to adapt to changing
circumstances and to react to events where necessary.
The Internal Audit plan for FY22 will continue to
include monitoring the embedding of the Internal Controls
Framework relating to internal financial controls, continuing
to work closely with the Finance team to ensure that the
improvements implemented are permanent in nature.
Effectiveness of external audit
A review of the effectiveness of the FY20 external
audit, undertaken by an internal survey of members of the
Committee, the CFO, and the internal finance team, was
undertaken and the results considered by the Committee
in December 2020. The review concluded that the external
audit was executed effectively by Deloitte.
Supervision of the external auditor
The Committee oversees the external auditor by reviewing,
challenging, and approving the audit plan and ensuring that
it is consistent with the scope of the audit engagement. The
Committee meets regularly with the external auditors, both
with and without management present. During the review of
the audit plan, the Committee discussed and agreed those
financial statement risk areas identified by the auditor that
required additional audit emphasis, including the impact on
the Company of the Covid-19 pandemic and global economic
uncertainty. The Committee discussed and challenged the
auditor’s assessment of materiality, including the level for
reporting unadjusted differences, and considered the
auditor’s decision to apply a lower materiality for the FY21
audit. The Committee also acknowledged the increased
audit scope which now includes Germany, Austria, and
Belgium as full scope audits, due to previously identified
control weaknesses. The audit opinion on pages 129 to 142
provides a full explanation of the scope of the audit, concept
of materiality and key accounting and reporting judgements.
Independence of external auditor
Auditor independence is maintained by reviewing Deloitte’s
confirmation of their independence and monitoring the
nature and value of non-audit services carried out. The
Committee will continue to ensure that employees of the
external auditor who have worked on the audit in the past
two years are not appointed, without prior approval of the
Committee, to senior financial positions within the Group.
In addition, the rotation of the lead partner occurs every
five years.
The Committee assessed the independence of the external
auditor and concluded that they were independent and that
there were no non-audit services provided by Deloitte in the
year under review.
Reappointment of auditor
Following a formal tender process in 2017, Deloitte LLP were
appointed as auditor at the 2017 AGM. The senior statutory
auditor, Edward Hanson, has overseen the audit of the
Group since the financial period ended 28 April 2018. The
Group intends to put the external audit out to tender at least
as often as is required by applicable law, rules, regulations
and best practice in line with the Competition and Markets
Authority and requirements for mandatory tendering and
rotation of the audit firm. Under current regulations the
external audit must be put out to tender by 2027. The
Company has complied with The Statutory Audit Services
for Large Companies Market Investigation (Mandatory
Use of Competitive Processes and Audit Committee
Responsibilities) Order 2014 (Article 7.1) during the financial
year. With respect to the re-appointment of Deloitte as
auditor, their performance and the quality of the audit
was an important consideration for the Committee.
102
Superdry plc Annual Report 2021 Governance → Audit Committee Report
Audit fees
The Committee was satisfied that the level of audit
fees payable in respect of the audit services provided of
£2,500,000 (FY20: £1,950,000) was appropriate. The level
of audit fee continues to be higher than in previous years due
to the ongoing deficiencies in the control environment.
Non-audit services
The Group’s policy for non-audit services is in line with
the recommendations set out in the Financial Reporting
Council’s (FRC) Guidance on Audit Committees (2016)
and the requirements of the FRC’s Revised Ethical
Standard (2019) (Ethical Standard). In line with those
recommendations and requirements, an external audit firm is
only appointed to perform a service when doing so would be
consistent with both the requirements and the principles of
the Ethical Standard, and when its skills and experience
make it the most suitable supplier. In addition, the Ethical
Standard requires an assessment of whether it is probable
that an objective, reasonable and informed third party
would conclude that independence is not compromised.
At times, it is in the Group’s and shareholders’ interests
to engage the external audit firm to deliver services.
For permitted non-audit services that are clearly trivial,
the Audit Committee has pre-approved the use of the
external auditor subject to the limits set out in the Group’s
Non-Audit Services Policy. The level of non-audit fees is
monitored to ensure that they do not exceed 70% of the
average annual statutory audit fees payable over the last
three financial years.
There were no non-audit services performed by the Group’s
external auditor in FY21.
Whistleblowing arrangements
The Group has a Whistleblowing Policy and an independent,
externally facilitated whistleblowing line is in operation
(Safecall). The Committee reviewed the whistleblowing
arrangements during FY21 and found them to be operating in
accordance with expectations. The Whistleblowing Policy is
reviewed on an annual basis by the Committee and during
FY21 one important change to that policy was made: the
ability for a whistleblower to choose to have a confidential
line of communication directly to the Audit Committee Chair,
rather than being sensitively handled in the normal way by
our Company Secretarial team. The Committee is satisfied
that colleagues continue to have the opportunity to raise
concerns in confidence about possible fraudulent activity
or unethical behaviour. The Committee is also satisfied
that arrangements are in place for the full investigation and
escalation of matters reported to the whistleblowing line.
During FY21, the Committee received a detailed analysis
of the calls received by the whistleblowing line and was
informed that there had been no instances of reported fraud.
Anti-bribery and corruption
Controls are in place to ensure ongoing compliance with
the Bribery Act 2010. The Committee reviews, on an annual
basis, a report on the Group’s gift register, which includes
gifts and hospitality given and received by colleagues from
external business relationships, above an agreed threshold.
The Group’s Anti-Bribery and Corruption Policy was
reviewed and updated in July 2020.
Alastair Miller
Audit Committee Chairman
15 September 2021
103
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Directors’ Remuneration Report
The Remuneration Committee and
how it operates
The Committee met seven times during the year and each
Committee member attended each meeting. In addition
to the members of the Committee, the Chief Executive
Officer (or Interim Chief Executive Officer), Group HR
Director and other members of the Board attended
each of the meetings by invitation.
The role of secretary to the Committee is performed
by the Company Secretary or her nominee. A report on
the Committee’s activities is given to the Board at each
Board meeting, following a meeting of the Committee.
Key responsibilities of the
Remuneration Committee
• Determine the framework and policy for the
remuneration of the Chair, Chief Executive Officer,
Executive Directors, the Company Secretary and other
Executive members and ensure it remains appropriate;
• Advise on and agree the total individual remuneration
of each Executive member, giving due regard to any
legal requirements, the Code and the Listing Rules;
• Approve the design of the annual bonus (and targets)
and share awards operated for Executive members,
the total annual payments made under such schemes
and provide oversight and guidance in relation to other
Group-wide incentive/share award proposals, to ensure
that these are aligned to performance, Superdry culture
and the Board’s risk appetite; and
• Oversee and advise on the Remuneration Policy and
benefits structures throughout the Group to ensure
they are aligned with the Group’s strategy, culture
and values while promoting its long-term success
and enable the attraction, retention and motivation
of all colleagues to deliver the Group’s strategy.
Part One – Annual Statement
Georgina Harvey
Chair of the Remuneration Committee
Dear Shareholders
On behalf of the Board, I am pleased to present the
Directors’ Remuneration Report for the financial year ended
24 April 2021. This financial year has been overshadowed
by the impact of the global Covid-19 pandemic. Last year,
in consultation with our largest shareholders, the
Remuneration Committee made small changes to its
Remuneration Policy (which was supported by 97% of our
shareholders at the 2020 AGM), resolving to review the
Policy again during FY21 when more ‘normal’ economic
conditions returned. Superdry embarked on its brand reset
in the Autumn/Winter of 2020, but as the financial year
unfolded, it became clear that the pandemic would again
impact the Group’s performance, with further lockdowns and
store closures in all countries in which we operate. However,
while it was necessary for the Committee to review the
Policy through the lens of the continuing pandemic, the
changes needed to support the developing strategy, the
culture at Superdry and the path to growth were clear. These
are explained in more detail below.
Remuneration in respect of FY21 and our
continued response to Covid-19
In respect of the financial year ended 24 April 2021:
• Base salary/fee reductions for: (i) the CEO, CFO
and Non-Executive Directors (25%); and (ii) Executive
Committee members (20%), which commenced on 1 April
2020, continued until 30 June 2020 for the CFO and the
Executive Committee and until 30 September 2020 for
the CEO and Non-Executive Directors;
• The 2020/21 annual bonus plan was withdrawn across the
Group at the start of the financial year and there was nil
bonus payable for the financial year 2019/20 due to
performance thresholds not being met; and
• The 2017 PSP awards lapsed in 2020 as a result of missing
the threshold performance targets and no PSP awards
were granted to the Executive Directors in 2020/21
(although Restricted Share Awards were granted
below Board level).
104
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Preparation of this report and compliance
This report has been prepared in accordance with the Large
and Medium-sized Companies and Group (Accounts and
Reports) Regulations 2013, as amended, the UK Code of
Corporate Governance 2018 and the Listing Rules. This
report is split into three sections:
• The Annual Statement which summarises remuneration
outcomes for FY21 and how the Remuneration Policy will
operate for FY22;
• The Remuneration Policy Report, which sets out our new
Remuneration Policy; and
• The Annual Report on Remuneration, which sets out
remuneration for FY21 and our remuneration proposals
for FY22.
The Annual Statement and Directors’ Remuneration
Report will be subject to an advisory vote while the new
Remuneration Policy will be subject to a binding vote at
the 2021 AGM.
Remuneration Policy review
Superdry rolled forward its Remuneration Policy at the
2020 AGM, primarily updating it to reflect developments
in corporate governance. However, since my appointment
just over two years ago, it has become clear that long-term
incentive awards at Superdry have not been working for
some time. The Committee is therefore proposing to switch
from conventional Performance Share Plan (PSP) awards to
Restricted Share Awards (RSAs) for the Executive Directors
from 2021 onwards. In addition, we wish to make a change
to dilution limits and post cessation guidelines as
explained below.
Switch from PSPs to RSAs
The ability to grant PSP awards, up to 200% of salary, will be
removed from the Policy. Subject to shareholder approval,
following the 2021 AGM and then annually thereafter,
Executive Directors may receive RSAs:
• of up to 75% of salary. This represents a 62.5% discount
from the PSP policy maximum of 200% of salary and a
50% discount in respect of the most recent PSP grant
made to an Executive Director in 2019;
• which will operate over five years. RSAs will normally
vest after three years from grant subject to: (i) continued
employment; (ii) satisfactory personal performance during
the relevant vesting periods; and (iii) a positive assessment
of performance against an underpin (see below); and once
vested, the resulting shares may not be sold until at least
five years from the grant date (other than to pay
relevant taxes).
Underpin: While the default position is that RSAs granted to
Executive Directors ultimately vest, the Committee will retain
discretion to reduce the vesting level (including to zero) after
considering a number of performance measures over the
vesting period linked to the business strategy, including but
not limited to revenue; % of full price sales; cash flow; PBT;
and margin, and being satisfied that there have been no
environmental, social or governance issues resulting in
material reputational damage. In addition, and irrespective
of performance against the underpin, the Committee
will retain discretion to reduce the vesting level in
exceptional circumstances.
In addition to simplifying the Remuneration Policy at
Superdry, the switch from PSP awards to RSAs is
being proposed because it will:
• better reflect the challenges of resetting Superdry.
As previously communicated to the market, we are
currently in the process of resetting Superdry and while
significant progress has been made in this regard, the
external outlook remains challenging and there remains
a substantial amount of legacy issues which are being
addressed. Given: (i) the level of change in the business;
(ii) the impact of Covid-19 restrictions; and (iii) consumer
confidence levels more generally at the current time,
setting speculative three-year targets is not
considered appropriate;
• increase alignment with Superdry’s culture. Following
Julian Dunkerton’s return to the business, we have worked
hard to reinstate a culture of creativity and inclusiveness
where decisions are made in the long-term interests of
Superdry regardless of the short-term financial rewards on
offer. RSAs will remove the issue of identifying appropriate
performance metrics and offer a narrower and more
predictable range of value outcomes, which is more
appropriate for our culture than the current, highly geared,
PSP structure. In addition to the above, the Remuneration
Committee is extremely conscious of the political and
societal influences to reduce executive pay levels
(as demonstrated by the Committee’s response to
Covid-19 – see above);
• increase internal alignment within Superdry.
Reflecting the cultural shift noted above and following
a review of the positive employee feedback on RSAs
we received following an extensive number of listening
group sessions, Superdry already grants RSAs below
Board level. For information, RSAs were granted to c.550
employees in 2020, 428 of which had no prior eligibility for
any PSP or bonus scheme, and we will continue to extend
the roll out of share-based awards deeper into Superdry
where possible (although see current dilution constraints
below); and
• Aid retention in respect of the Senior Management Team,
given the challenges set out above and noting that there
was no annual bonus for 2020/21 (a bonus was last paid to
Executive Directors in 2018) and outstanding PSP awards
are not expected to vest.
The terms of the PSP approved by shareholders at the
2020 AGM permit the grant of RSAs to Executive Directors
(providing that this is permitted by the prevailing shareholder
Remuneration Policy) so no new share plan is required
assuming shareholder approval for the new Policy is
obtained. However, the Committee does wish to make
a change to the current dilution limits. Superdry operates
105
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Remuneration framework
The Board is committed to ensuring that the remuneration
framework supports the strategy and that those individuals
tasked with leading Superdry are motivated to drive
the business objectives and priorities that need to be
successfully delivered. To align the interests of our
leaders with those of shareholders, a significant proportion
of performance related remuneration is in the form of RSAs,
designed to encourage a long-term, sustainable mindset.
The Remuneration Policy for leaders at Superdry is based
on the principles below.
Recruit and
retain high
calibre talent
Embed our
unique values
Drive share
ownership
Deliver
long term
sustainable
growth
Aligned to the
business
objectives
Simple and fair
Building a
team of
talented
people
Reinforce our
unique family
culture
Aligning
shareholder
and colleague
interests
standard 5% and 10% in 10-year dilution limits albeit the
current 5% limit is creating a headroom issue given the
current market capitalisation of the Company and our culture
of granting RSAs and all-employee share awards throughout
Superdry. As such, it is proposed that the PSP rules will be
amended to remove the 5% in 10-year discretionary plan limit
although the Committee’s intention is that the 5% in 10-year
discretionary award limit will be re-introduced in time.
In addition, the Committee noted that the Investment
Association’s (the IA) Principles of Remuneration include
‘turnaround situations’ as an appropriate rationale for
introducing RSAs and this is very much in line with
Superdry’s current position. In respect of our longer-term
strategy, the use of RSAs is considered to be well aligned
to enhancing our strategy of delivering shareholder returns
from a culture of creativity and inclusiveness, and helping
us to make strides towards our goal of becoming the
most sustainable listed global fashion brand, given that
management (and indeed the wider employee population
receiving RSAs) will be more focused on decisions which
enhance long-term value creation, rather than hitting
shorter-term financial targets. We are already seeing the
benefits of encouraging longer-term thinking (helped by
wider employee share ownership under the RSA). For
example, we have accelerated our commitment to ensure
all pure cotton items are organic by five years to 2025
(as recognised by Drapers at its Sustainable Fashion
Awards in February and Superdry’s recent 1st in the
Financial Times 2021 Climate Leaders).
Board changes in FY21 and FY22 to date
The following Board changes took place in FY21:
• Nick Gresham stepped down as Chief Financial Officer
on 15 October 2020 and he ceased employment on
15 January 2021.
106
Delivering the
strategic plan
Encourage
behaviours
delivering
long-term
sustainable
brand growth
Easily
understood
by others and
balanced
against
the wider
workforce
• Shaun Wills was appointed Chief Financial Officer on
26 April 2021.
• Peter Williams resigned as Chairman on 29 April 2021.
• Peter Sjölander was appointed Chairman on
29 April 2021.
• Julian Dunkerton was appointed permanent Chief
Executive Officer on 16 December 2020, having served
as interim CEO since 2 April 2019.
Full details of the remuneration and any termination
arrangements of Executive or Non-Executive Directors are
set out in Part Three: Annual Report on Remuneration. In
March 2021, the Committee consulted with Superdry’s top
15 investors and the main proxy advisory agencies (the IA,
ISS and Glass Lewis) in respect of changes to the FY21
Remuneration Policy. During the consultation exercise, a
letter was sent to the top 15 investors and the main proxy
advisory agencies, outlining the new Policy and explaining
the reasoning for the proposed changes. Feedback was
actively requested from the stakeholders on the proposals
throughout April 2021. Through this process and feedback
received, it was clear that the Committee should adopt an
approach to post cessation shareholding guidelines in line
with guidance from the IA and this change has been
incorporated into the proposed Remuneration Policy. At the
end of the consultation exercise, a wrap up letter was sent to
those consulted which set out the feedback received and the
Committee’s response. The Committee was encouraged by
the positive feedback and is grateful for the support received
from the vast majority of investors consulted.
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Details of the proposed implementation of the Policy for
FY22, including details of the proposed RSAs, are set out
in part three of this report.
to growth in times of ongoing global economic uncertainty.
I sincerely hope that you will vote in favour of the resolutions
put before you at this year’s AGM.
Conclusion
I trust that you are supportive of the Policy changes
proposed, and of our careful and considered approach to
remuneration for FY22, which has been formed to support
Superdry’s continued brand reset, and the route back
Georgina Harvey,
Remuneration Committee Chair
15 September 2021
Committee activities during FY21
The key activities undertaken during the year were
as follows:
• Reviewing the remuneration of Executive Committee
members and other senior managers (including salary,
benefits and pensions and any bonus schemes
if applicable);
• Reviewing and approving FY21 Restricted Share
Awards to the Executive Committee members and
wider workforce (excluding Julian Dunkerton and
Nick Gresham);
• Reviewing the FY21 Annual Bonus Scheme and
determining not to operate the incentive plan for
the year ended 24 April 2021;
• Reviewing Group-wide share plans in light of the
Group’s evolving strategy and prevailing economic
conditions and business performance;
• Reviewing the principles of Group annual pay and
benefits encompassing all employees globally;
• Considering remuneration-related measures to mitigate
the continuing impact of Covid-19 on Superdry;
• Reviewing and approving the annual Gender Pay
Gap Report;
• Reviewing and approving the CEO pay ratio;
• Reviewing and approving an updated Remuneration
Committee terms of reference;
• Reviewing the Directors’ Remuneration Report and
Group-wide remuneration policies;
• Consulting with the Group’s largest shareholders and
investor representative agencies in relation to proposed
changes to the Remuneration Policy;
• Considering and approving the remuneration of
senior new hires, including the Chief Executive Officer
(to a permanent position), Chief Financial Officer, Chief
Operating Officer, Chief Marketing Officer and the
new Chair;
• Considering any termination arrangements for
departing Executive Committee members; and
• As part of the annual Board performance review,
conducting an internal Committee performance
review against the Committee’s terms of reference,
considering the results of that review and
identifying objectives to drive improvements
in Committee performance.
In addition, when determining the Policy and practices,
the Committee has addressed the following (as per
Provision 40 of the Code):
Clarity
Our Policy is simple and understood by our senior team,
by wider colleagues (including the SD Voice) and by
investors who participated in our FY21 consultation.
Simplicity
The Committee uses plain language to explain the
Policy to colleagues, investors and wider stakeholders.
Our remuneration structures are not complex.
Risk
Our Policy is based on (i) a combination of both short-
and long-term plans based on financial and non-financial
targets; (ii) a combination of cash and equity; and (iii) a
number of shareholder protections (i.e. post vesting
holding periods, shareholding guidelines, malus and
clawback provisions) which have been designed to
reduce inappropriate risk taking.
Predictability
Our incentive plans are subject to individual caps, and our
share plans have also been subject to market standard
dilution limits. The scenario charts in the Remuneration
Policy illustrate how the rewards potentially receivable by
our Executive Directors vary, based on performance and
share price growth.
Proportionality
There is a clear link between individual awards, delivery
of strategy and our long-term performance. In addition,
the structure of our annual bonus and RSAs, together
with the structure of the Executive Directors’ service
contracts, ensures that poor performance is
not rewarded.
Alignment to culture
Our culture and strategy are fully supported through
the annual bonus, which measures performance against
the KPIs that underpin the delivery of our strategy
and use of RSAs, which creates both internal and
shareholder alignment.
Throughout 2021, colleagues have been consulted on
various topics of remuneration. Specifically, the SD
Voice has been consulted on the approach to the grant of
RSAs, Group Pay Review, job levelling, and recognition
practices. These sessions were used to inform decision
making at the Remuneration Committee and take
feedback as to whether the remuneration practices
were in line with those in the Code and Policy specified.
107
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Part Two – Directors’
Remuneration Policy (unaudited)
Proposed Policy
This section sets out a summary of the Remuneration Policy
which will be voted on by shareholders at the 2021 AGM.
Remuneration Policy overview
We aim to provide a remuneration structure and approach
that helps align the interests of Executives and shareholders,
and enables the attraction, retention and motivation of high
calibre people with the capability to drive continued growth
of the business. Where the Committee has discretion in
implementing the Remuneration Policy, that discretion
will be exercised diligently and in a manner aligned with
shareholder interests. Discretion will only be exercised within
the boundaries and limits set out in the Remuneration Policy.
Policy scope
The Policy applies to the Chairman, Executive Directors and
Non-Executive Directors.
Policy duration
Subject to approval, the new Policy will apply from that date
for a maximum of three years.
Changes from the current Policy
The Policy changes being proposed are as follows:
• PSP awards will be replaced by RSAs. The ability to
grant PSP awards, up to 200% of salary, will therefore
be removed from the Policy. Following the 2021 AGM,
and then annually thereafter, Executive Directors may
receive RSAs:
– of up to 75% of salary. This represents a 62.5% discount
from the PSP policy maximum of 200% of salary and a
50% discount in respect of the most recent PSP grant
made to an Executive Director in 2019.
– which will operate over five years. RSAs will normally
vest after three years from grant subject to: (i) continued
employment; (ii) satisfactory personal performance
during the relevant vesting periods; and (iii) a positive
assessment of performance against an underpin (see
below); and once vested, the resulting shares may not
be sold until at least five years from the grant date
(other than to pay relevant taxes).
Underpin: While the default position is that RSAs granted to
Executive Directors ultimately vest, the Committee will retain
discretion to reduce the vesting level (including to zero) after
considering a number of performance measures over the
vesting period aligned to the business strategy including but
not limited to revenue; % of full price sales; cash flow; PBT;
and margin, and being satisfied that there have been no
environmental, social or governance issues resulting in
material reputational damage. In addition, and irrespective
of performance against the underpin, the Committee
will retain discretion to reduce the vesting level in
exceptional circumstances.
• No changes are proposed to the ‘in employment’
shareholding guidelines (200% of salary for the CEO
and CFO). However, the ‘post-employment’ guidelines will
be adjusted from the current phased approach (200% of
salary up to the first anniversary of the date of cessation,
reducing to 100% of salary between the first and second
anniversary of the date of cessation) to 200% of salary for
the full two years post cessation.
108
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Summary of the Executive Director Remuneration Policy
Element: Base salary
Purpose and link to strategy
Maximum opportunity
Set at levels to attract and retain talented Executive
Directors of the high calibre required to develop and deliver
our ambitious growth strategy. Base salary will reflect each
Executive Director’s individual skill, experience and role
within the Group. Any changes to salary will take account
of average increases across the Group.
Salary increases will typically be in line with the general level
of increase awarded to other employees in the Group and/
or the Executive Director’s country of employment.
In exceptional circumstances (for example, where there is
an increase in scale, scope and/or responsibility, to reflect
the development and success of the individual within the
role, and/or to take account of relevant levels/market
movements) a higher increase may be awarded.
There is no prescribed maximum base salary level or
maximum annual increase.
Current salaries are detailed in the Annual Report
on Remuneration.
Operation
Performance measures
When determining base salary the Committee typically
takes into account:
Individual and business performance are taken into
consideration when deciding salary levels.
• salary levels for comparable roles at companies of a
similar size, industry, global scope and complexity;
• business and individual performance;
• changes to the scale and complexity of the role; and
• salaries paid to other employees across the Group.
Base salary is normally paid on a monthly basis in cash. The
base salary for each Executive Director is normally reviewed
annually in May by the Committee, although an out of cycle
review may be conducted if the Committee determines this
is necessary. A salary review will not necessarily lead to an
increase in salary.
109
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Element: Pension
Purpose and link to strategy
Maximum opportunity
To provide retirement benefits which are market
competitive and to enable us to attract and retain
Executive Directors of the right calibre.
In line with the general workforce contribution rate
(as a % of salary).
Operation
Executive Directors can choose to participate in the
personal pension plan relevant to the country where they
are employed, and/or to receive a cash allowance, or a
combination of the two. Our Group personal pension plan
is a defined contribution plan.
Element: Other benefits
Purpose and link to strategy
Maximum opportunity
To ensure Superdry is broadly competitive on benefits with
broader market practice.
There is no maximum level of benefits provided to an
individual Executive Director.
To support personal health and well-being.
Participation by Executive Directors in the SAYE scheme,
and any other all-employee share plan operated in the
future, is limited to the maximum award levels permitted
by HM Revenue & Customs.
Operation
Benefit provision is set at an appropriate market level taking
into account market practice in the Executive Director’s
home jurisdiction, the jurisdiction where they are based,
and benefits for similar roles at similar companies and the
level/type of benefits provided elsewhere in the Group.
The benefits to which Executive Directors are entitled
include (but are not limited to) private medical insurance
(for the individual and their family), company sick pay,
holiday pay, life assurance, car allowance and staff
discount on Superdry products. Other benefits may
be provided where appropriate.
In-country and global relocation support may also be
provided where appropriate.
Executive Directors are eligible to participate, on the same
basis as other employees, in our SAYE and BAYE schemes.
They may also be granted eligibility to participate on the
same terms in any new benefit plans, including all-employee
share incentives, set up for the wider employee group.
110
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Element: Annual performance bonus
Purpose and link to strategy
Maximum opportunity
To encourage and reward the achievement of challenging
financial and strategic performance targets during a
financial year. The performance measures set each
year align to our strategy and shareholder value creation.
Up to 150% of base salary.
Operation
Performance measures
Bonus payments up to 100% of salary are normally awarded
in cash and are not pensionable. An individual Executive
Director may choose to defer bonus awarded into our
Group personal pension plan.
Bonus deferral: To the extent that bonus potential is
restored to the 150% of salary Policy maximum during the
Policy period (noting that bonus is capped at 100% of salary
for FY22), one third of any bonus will be deferred into shares
for three years.
Performance is normally assessed over one financial year.
The annual performance bonus may be based on financial
metrics (e.g. revenue and/or profit) and personal and/or
strategic business objectives. The majority of the bonus will
be determined by Group financial performance. Metrics and
targets will be relevant to the particular performance year
and are aimed at securing a sustainable long-term
business model.
The performance criteria and performance targets are
determined by the Committee each year and include
threshold levels for minimum award (below which no bonus
will be awarded), on-target award and maximum award.
The Committee will set demanding performance targets
to encourage stretch performance. These targets are
considered to be commercially confidential and will
therefore be disclosed in due course after the
performance period has ended.
A straight-line sliding scale between threshold (no more
than 25% of opportunity), target (50% of opportunity) and
maximum (100% of opportunity) is used to determine the
level of award.
Malus and clawback provisions apply as described below.
111
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Element: Restricted Share Awards
Purpose and link to strategy
Maximum opportunity
Drives sustained long-term performance, aids retention and
aligns the interests of Executive Directors with shareholders.
Up to 75% of salary.
Operation
Performance measures
Restricted Share Awards are granted on a discretionary
basis and are subject to continued employment at the
end of a three-year performance period with a two-year
post-vest holding period. Awards may be structured
as conditional awards or nil or nominal cost options.
Executive Directors may benefit, in the form of cash or
shares, from the value of any dividend paid between the
date of grant and the date of vesting (or post-vesting
holding period if later) to the extent that awards vest.
Although no formal performance measures apply to RSAs,
the Committee will retain discretion to reduce the vesting
level (including to zero) after key strategic measures over
the vesting period have been considered (including but not
limited to revenue, % of full price sales, cash flow, PBT
and margin) and being satisfied that there have been no
environmental, social or governance issues resulting in
material reputational damage.
Malus and clawback provisions will apply as
described below.
Element: Share ownership guidelines
Purpose and link to strategy
Level
To help further strengthen the alignment between
management and shareholders.
Minimum of 200% of base salary.
Operation
Performance measures
In employment: Executive Directors not holding shares
worth at least 200% of their base salary will be expected to
retain 50% of any share award which vests (net of tax) until
such time as that level of holding is met.
Post cessation: Executive Directors will need to retain
shares equal to 100% of the in-post shareholding guideline
up until the second anniversary of employment cessation
(or actual shareholding if lower).
Any shares purchased by an Executive Director, shares
acquired in respect of the IPO, shares acquired through
buyout awards and share awards granted prior to the 2020
AGM will be excluded from this post cessation guideline.
112
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Selection of performance measures
Profit is normally the primary financial measure for
the annual bonus plan. At the sole discretion of the
Remuneration Committee, adjusting items may be removed
where the inclusion of such items would be inconsistent
with fair measurement, and actual tax may be adjusted
to normalised rates if they are considered unsustainable.
Performance targets relating to the annual bonus plan
are normally set from the Group’s annual budget, which
is reviewed and signed off by the Board prior to the start
of each financial year. Targets are based on a number of
internal and external reference points. Targets are set to
be stretching but achievable, with regard to the particular
strategic priorities and economic environment in a given
year. Strategic targets for the annual bonus may be set each
year based on the Company’s prevailing strategic objectives
at that time. Targets will be set on a measurable, quantifiable
basis where possible, but due to the nature of the objective,
may require some subjective assessment.
In respect of the RSAs granted to Executive Directors, the
Committee must be satisfied with Superdry’s performance
and delivery against performance measures (including
revenue, % of full price sales, cash flow, PBT and margin)
and be satisfied that there have been no environmental,
social or governance issues resulting in material
reputational damage.
The Committee retains the discretion to alter the weighting,
substitute or use new performance measures for future
incentive awards, if they are believed to better support the
strategy of the business at that time.
Malus and clawback provisions
The Committee has discretion to cancel, reduce or clawback
individual or all annual bonus awards in certain
circumstances including:
• A misstatement of results that resulted in an award being
paid at too high a level;
• A material failure of risk management or health and safety;
• Serious reputational damage to Superdry; and/or personal
misconduct; and
• Corporate failure or insolvency.
The Committee may at any time before the vesting of
share awards reduce the number of shares in certain
circumstances including if:
• A material misstatement of financial results has resulted in
the award having been granted over a higher number of
shares than would otherwise have been the case; and
• The number of shares awarded was based on any other
kind of error or basis of information or assumption that
turns out to be inaccurate, and resulted in the award
having been granted over a higher number of shares than
would otherwise have been the case.
For three years after any PSP/RSA award vests, the
Committee may decide that the individual is subject to
clawback if:
• There has been a material misstatement of results that
resulted in an award being paid at too high a level;
• There has been an error in assessing any performance
condition or there was inaccurate or misleading
information or assumptions that resulted in the award
vesting at a higher level than otherwise would have
been the case;
• There has been serious reputational damage to Superdry;
and/or personal misconduct; and
• There is a corporate failure or insolvency.
Legacy arrangements
The Company will honour any commitments entered
into prior to the approval and implementation of the
Remuneration Policy as detailed in this report, and
Executive Directors will be eligible to receive payment
from any historical awards made.
Scenario chart
The charts below show how the Directors’ Remuneration Policy set out above is expected to be applied for Executive Directors
during the Policy period using the following assumptions:
Minimum
• Consists of base salary, benefits and pension.
• Base salary from 1 May 2021.
• Benefits are based on estimated values for 2021/22.
• Pension of 4% of salary.
• RSA of 75% of salary (noting that actual awards may be lower).
Julian Dunkerton
Shaun Wills
Base salary
Benefits
Pension
RSA
Total minimum
£600,000
£375,000
£16,000
£12,000
£24,000
£450,000 £1,090,000
£15,000
£281,250
£683,250
• As per the minimum scenario plus an on-target annual bonus of 50% of the maximum potential.
• As per the minimum scenario plus a maximum annual bonus (150% of salary), noting that potential
awards may be lower (the potential for FY22 will be set at 100% of salary).
• As the maximum scenario plus the value resulting from a share price growth of 50% from the
RSA award.
Target
Maximum
Maximum with
50% share price
growth
113
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Julian Dunkerton
Chief Executive Officer
Shaun Wills
Chief Financial Officer
£’000
£1,090
£1,540
£1,990
£2,215
£’000
£683
£965
£1,246
£1,386
10%
20%
22%
29%
46%
41%
41%
30%
59%
41%
32%
29%
£2,250
£2,000
£1,750
£1,500
£1,250
£1,000
£750
£500
£250
£0
£2,250
£2,000
£1,750
£1,500
£1,250
£1,000
£750
£500
£250
£0
29%
30%
41%
41%
59%
22%
46%
10%
20%
41%
32%
29%
Minimum
On-target
Maximum
Maximum
with share
price growth
Minimum
On-target
Maximum
Maximum
with share
price growth
Key
■ Fixed pay (salary, benefits, pension)
■ Annual bonus
■ RSA
■ Share price growth
Remuneration arrangements across Superdry
• Share awards – selected below-Board employees may
The reward philosophy continues to be consistent across
the Group, namely that reward should support our business
strategy and be sufficient to attract, motivate and retain
high performing individuals. Within this framework, there are
differences for a range of reasons, including global location,
culture, best practice, employment regulation, and the local
employment market conditions.
• Salaries and benefits – a range of factors are considered
including business performance, individual capability and
performance, the pay of other employees, and external
market data.
• Annual performance bonus – consistent with the
Remuneration Policy for Executive Directors, annual
bonuses are typically linked to business performance with
a focus on profit, although the business retains the right to
void a bonus award in circumstances where we deem an
individual has not performed to an acceptable level or has
acted inappropriately during the performance period.
be invited to receive Restricted Share Awards on the same
or similar terms to those granted to Executive Directors.
• All employee share schemes – in the UK, the Group
operates SAYE and BAYE share schemes which are
open to all eligible employees. Under the SAYE scheme,
employees can elect to save up to £500 each month for
a fixed period of three years. At the end of the savings
period, individuals may use their savings to buy Superdry
ordinary shares at a discount capped at up to 20% of the
market price set at the launch of the scheme. The BAYE
scheme gives employees the opportunity to buy shares
up to the value of £1,800 per year using pre-tax earnings.
For every 10 shares purchased through this scheme, the
Group offers one free matching share.
• Retirement benefits – in line with local country practices,
we encourage all employees to contribute appropriate
savings toward their retirement. In the UK, we operate
pension arrangements within the Occupational and
Personal Pension Schemes (Automatic Enrolment)
Regulations 2010.
114
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Executive Directors’ service agreements
The following table sets out a description of any obligations on Superdry, contained in the current Executive Directors’ contracts,
which could give rise to, or impact, remuneration payments or payments for loss of office.
Element
Terms
Notice period
Julian Dunkerton – 12 months by Superdry and 12 months by the Executive Director.
Shaun Wills – six months by Superdry and six months by the Executive Director.
Contract date
Julian Dunkerton – 2 April 2019 (interim appointment), 16 December 2020
(permanent appointment).
Shaun Wills – 26 April 2021.
Base salary
As per contracts.
Pension contributions
Employer pension contribution.
Contractual benefits
Contractual entitlement to:
• Private medical insurance;
• Company sick pay;
• Life assurance;
• Holiday pay;
• Car allowance; and
• Discount on Superdry products.
Annual bonus
Participation is subject to the Committee’s discretion.
Long-term incentive plan
Participation is subject to the Committee’s discretion.
The service contract for any new Executive Director is likely
to include provisions for a notice period of up to six months
by either party, an annual salary review and participation in
the Company’s annual bonus plan and RSA.
All Executive Director service contracts are available for
inspection at our registered office during normal hours of
business and will also be available at our AGM.
Discretions retained by the Committee
The Committee will operate the annual bonus and share
plans according to their respective rules (or relevant
documents), in line with the applicable approved
Remuneration Policy and in accordance with the Listing
Rules, where relevant. The Committee retains certain
discretions, consistent with market practice, with regard
to the operation and administration of these plans. These
include, but are not limited to, the following in relation to
RSAs: the participants; the timing of grant of an award; the
size of an award; within policy limits, the determination of
vesting; the discretion that may be required if dealing with
a change of control or restructuring of the Group;
determination of the treatment of leavers; adjustments
required in certain circumstances (e.g. rights issues,
corporate restructuring events and special dividends); and
reviewing performance underpins from one cycle to the next.
In relation to the annual bonus plan, the Committee retains
discretion over: the participants; the timing of grant of a
payment; the determination of the bonus payment; dealing
with a change of control; determination of the treatment of
leavers based on the rules of the plan and the appropriate
treatment chosen; the annual review of performance
measures and weighting; and targets for the annual
bonus plan from year to year.
In relation to the annual bonus plan, the Committee retains
the ability to adjust the targets and/or set different measures
if events occur (for example, material acquisition and/or
divestment of a business) which cause it to determine
that the conditions are no longer appropriate and that an
adjustment is required so that the conditions achieve their
original purpose and are not materially more or less difficult
to satisfy.
Any use of the above discretions would, where relevant, be
explained in the Annual Report on Remuneration and may,
as appropriate, be the subject of consultation with our
major shareholders.
The operation of our SAYE and BAYE share schemes will be
as permitted under HM Revenue & Customs’ rules and the
Listing Rules. Details of shares or interests in shares held by
Executive Directors at the end of the financial year are set
out in the Annual Report on Remuneration. These remain
eligible to vest based on their original award terms.
Approach to the recruitment and retention of
Executive Directors
When hiring a new Executive Director or promoting to
the Board from within Superdry, the Committee will offer
a package that is sufficient to attract, retain and motivate
the right talent, while at all times aiming to pay no more than
is necessary. In determining an appropriate remuneration
package, the Committee will take into consideration all
relevant factors including, but not limited to, the impact on
other existing remuneration arrangements, the candidate’s
location and experience, external market influences and
internal pay relativities.
115
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
The remuneration package for a new Executive Director
would be set in accordance with the terms of our prevailing
approved Remuneration Policy at the time of appointment,
and take into account the skills and experience of the
individual, the market rate for a candidate of that experience,
and the importance of securing the relevant individual.
Salary would be provided at such a level as required to
attract the most appropriate candidate and may be set,
initially, at a below mid-market level on the basis that it may
progress towards the mid-market level once expertise and
performance has been proven and sustained. The annual
bonus potential would be limited to 150% of salary and
RSAs would be limited to 75% of salary.
Pension provision will be workforce aligned and other
benefits will be offered in line with local market practices
dependent on where an Executive Director is located.
In addition, the Committee may offer additional cash
and/or share based elements to replace deferred or
incentive pay forfeited by an Executive Director leaving a
previous employer. It would seek to ensure, where possible,
that these awards would be consistent with awards forfeited
in terms of vesting periods, expected value and performance
conditions. For an internal Executive Director appointment,
any variable pay element awarded in respect of the prior role
may be allowed to pay out according to its terms. In addition,
any other ongoing remuneration obligations existing prior
to appointment may continue. For external and internal
appointments, the Committee may agree that certain
relocation and/or incidental expenses (as appropriate)
will be met.
Policy on payment for loss of office
We are committed to ensuring a consistent approach and
to not paying more than is necessary in the circumstances
of loss of office. In the event of an early termination of a
contract, the policy is to seek to minimise any liability. When
managing such situations, the Committee takes a range
of factors into account, including contractual obligations,
shareholder interests, organisational stability and the need
to ensure an effective handover. Executive Directors may be
entitled to a payment in lieu of notice (PILON) if notice is
served by us. In the normal course of events, the Executive
Director would work their notice period. In the event of
termination for cause (for example, gross misconduct
or negligence), neither notice nor PILON would be given
and the Executive Director would cease to perform
services immediately.
In the event of termination for reasons other than cause
(for example, resignation) where the individual is requested
by us to cease working before the end of the notice period,
a PILON may be payable. If a portion of the notice period
is served, the PILON payment will be reduced on a pro
rata basis. Payments may be made on a phased basis.
Alternatively, rather than making a PILON, we may place
an Executive Director on garden leave for the duration of
some or all of their notice period.
Where an Executive Director leaves during a financial year,
the annual bonus will not be payable with respect to the
period of the financial year worked in line with the Group’s
annual bonus scheme rules.
Any share-based entitlements granted to an Executive
Director under our share plans will be determined based
on the relevant plan rules. The default treatment for RSAs
is that any outstanding awards lapse on cessation of
employment. However, in certain prescribed circumstances,
such as death, ill health, injury, disability, retirement, sale of
the employing company or business outside the Group, or
any other circumstances at the discretion of the Committee,
‘good leaver’ status may be applied. For good leavers,
awards will normally vest on their normal vesting date,
subject to the satisfaction of the relevant performance
underpin at that time, and will be reduced pro rata to reflect
the proportion of the performance period actually served.
However, in the event of the death of an Executive Director,
the Committee has discretion to determine that awards vest
at cessation, subject to performance underpin, with no
service pro rata reduction.
Payment may also be made in respect of accrued benefits,
including untaken holiday entitlement, in line with the
treatment of other employees.
In addition, as is consistent with market practice, we may
pay a contribution towards an Executive Director’s legal
fees for entering into a settlement agreement, and may pay
a contribution towards fees for outplacement services as
part of a negotiated settlement.
There is no provision for additional compensation on
termination following a change of control, nor liquidated
damages of any kind.
Consideration of conditions elsewhere in Superdry
The Committee has oversight of the main compensation
structures throughout the business, and actively considers
the relationship between general changes to employee
remuneration and to Executive Director remuneration.
When considering changes to Executive Director
remuneration, the Committee is provided with relevant
comparative employee information (for example, average
salary review) across Superdry.
The Committee does not consider it appropriate to consult
directly with employees when formulating Executive Director
reward policy. However, it does take into account employee
feedback on remuneration from employee surveys, as
provided to the Committee by the Group HR Director.
Consideration of shareholder views – consultation on
Remuneration Policy
In April and May 2021, the Committee consulted with
Superdry’s top 15 investors and the main proxy advisory
agencies (the IA, ISS and Glass Lewis) in respect of changes
to the FY21 Remuneration Policy. During the consultation
exercise, it was clear that the Committee should adopt a
more conventional and recommended approach to post
employment cessation shareholding guidelines as promoted
by the IA and this change has been incorporated into the
new Remuneration Policy. At the end of the consultation
exercise, a wrap up letter was sent to those consulted
which set out the feedback received and the Committee’s
response. The Committee was encouraged by the positive
feedback and is grateful for the support received from the
vast majority of investors consulted.
116
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Summary of the Non-Executive Director Remuneration Policy
The Board aims to recruit high calibre Non-Executive Directors with broad commercial, international or other relevant
experience. The Remuneration Policy is as follows:
Element
Fees
Purpose and link to
strategy
Fees are set at an appropriate level to attract and retain high calibre Non-Executive Directors
and reflect the time commitment and responsibilities of each role and fees paid in other
companies of a similar size, industry, global scope and complexity.
Operation
Fees are normally reviewed annually and are normally paid in cash.
Each Non-Executive Director is paid a basic fee for undertaking Non-Executive Director
and Board duties. A higher fee is paid to the Chair of the Board and the Senior Independent
Director. Additional fees may also be payable for taking on Committee responsibilities and
other Board duties.
Non-Executive Directors also receive staff discount on Superdry products. Non-Executive
Directors do not receive any other benefits other than reasonable expenses. Travel and
other appropriate expenses (including fees incurred in obtaining professional advice in the
furtherance of their duties) incurred in the course of performing their duties are reimbursed
to Non-Executive Directors along with any associated taxes.
Non-Executive Directors are covered by the Directors’ and Officers’ insurance
and indemnification.
Maximum opportunity
As is the case for the Executive Directors, there is no prescribed maximum fee or maximum fee
increase. The aggregate fees payable to all Non-Executives combined are capped as set out in
Superdry’s Articles of Association.
Performance measures
No performance measures apply. Fees are set at an appropriate level to attract and retain high
calibre Non-Executive Directors.
When recruiting a new Non-Executive Director, the
remuneration arrangements offered will be consistent
with the policy presented above.
Non-Executive Directors are appointed for an initial period of
three years (subject to election at the Company’s AGM) and
then continue to serve subject to annual re-election at the
Company’s AGM. Appointments may be terminated by
either the Company or the Non-Executive Director giving
three months’ written notice. Save in respect of retirement
by rotation, a Non-Executive Director being removed from
office will be entitled to compensation equal to the fee
during any remaining notice period.
Name
Alastair Miller
Helen Weir
Faisal Galaria
Georgina Harvey
Peter Sjölander
Date of appointment
11 July 2019
11 July 2019
29 July 2019
29 July 2019
29 April 2021
All Non-Executive Director letters of appointment are
available for inspection at our registered office during normal
hours of business and will also be available at our AGM.
117
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Part Three: Annual Report on Remuneration
The following part of the Directors’ Remuneration Report, together with the Annual Statement, will be subject to an advisory
vote at the 2021 AGM and sets out how the Remuneration Policy will be implemented in FY22, and how it was implemented
in FY21.
The following sections of the Annual Report and Financial Statements are identified as audited or unaudited as appropriate.
Implementation of the Remuneration Policy for FY22
Base salary (audited)
Executive Directors’ base salaries are normally reviewed annually on 1 May, taking into account business and individual
performance, salary levels at companies of a similar size, industry, global scope, growth and complexity and the salaries paid
to other employees across Superdry. Current annual base salary levels are as follows:
Julian Dunkerton2
Shaun Wills3
Chief Executive Officer
Chief Financial Officer
From
1 May 2021
£600,000
£375,000
From
1 May 20201
£600,000
–
Increase
0%
n/a
1. Excluding a 25% reduction in base salary from 1 April to 30 September 2020.
2. Julian Dunkerton was appointed as Interim Chief Executive Officer on 2 April 2019. As per the announcement on 16 December 2020, he assumed the
title of Chief Executive Officer from this date and was made permanent.
3. Shaun Wills was appointed as Chief Financial Officer on 26 April 2021.
• Be set at a maximum of 75% of salary for the CEO and
CFO, albeit the Remuneration Committee will consider
the prevailing share price at the time of grant (which is
expected to be immediately after the 2021 AGM). The
actual grant levels, which may be lower than 75% of salary,
will not be agreed until much closer to the date of grant.
While Julian Dunkerton has not historically participated
in Superdry’s long-term incentive plan, the Remuneration
Committee wishes to ensure that Julian receives a fair
and market aligned total remuneration which is consistent
with the other members of the Executive Team, following
his appointment as the permanent CEO as announced in
December 2020. As such, he will be eligible for RSAs subject
to shareholders approving the new Policy at the 2021 AGM.
Benefits in kind and pension (unaudited)
No changes will be made to benefit provision. Pension
provision will be workforce aligned. As such, Julian
Dunkerton’s pension has been reduced from 7.5% of
salary to 4% of salary (Shaun Wills was appointed on
a pension of 4% of salary).
Annual bonus (unaudited)
The Committee’s current intention is that the annual
bonus plan will be reintroduced for 2021/22 in line with
the prevailing Policy albeit bonus potential will be capped
at 100% of salary rather than the 150% of salary Policy
maximum. Performance metrics will be based on financial
(majority) and personal/strategic (minority) targets.
Long-term share awards (unaudited)
As detailed in the Policy section above, RSAs to be granted
post the AGM in 2021 will:
• Vest after three years from the grant date, subject
to continued employment, satisfactory individual
performance and a positive assessment of performance
against the underpin. No shares can be sold until at least
five years from grant, other than those required to settle
any taxes; and
Non-Executive Directors (audited)
No change will be made in FY22 to the annual fees for Non-Executive Directors and the new Chair’s fee has been aligned to
that of the previous Chair’s fee. Annual fee levels for FY22 are therefore as follows:
Role
Chair (Peter Williams2)
Base fee for Non-Executive Directors
Senior Independent Director increment
Audit/Remuneration Committee Chair increment
From 25 April 2021
From 1 May 20201
£200,000
£200,000
£55,000
£17,500
£12,500
£55,000
£17,500
£12,500
1. From 1 April to 30 September 2020, base fees were reduced for Non-Executive Directors by 25%.
2. Peter Williams stepped down on 29 April 2021. Peter Sjölander was appointed Chair of Superdry on 29 April 2021 on an annual fee of £200,000.
118
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Single figure remuneration (audited)
Non–Executive Chair
Peter Williams4
Executive Directors
Julian Dunkerton5
Non–Executive Directors
Alastair Miller
Faisal Galaria
Georgina Harvey
Helen Weir
Former Directors
Nick Gresham6
Base salary/
fees1
Taxable
benefits2
Pension
contributions3
Annual
bonus
LTIPs
Other
payments
Total
Pay
Total
Fixed
Pay
Total
Variable
Pay
2021
2020
179,167
195,833
–
5,063
–
–
2021
2020
537,500
587,500
13,698
15,352
43,250
48,625
2021
2020
2021
2020
2021
2020
2021
2020
60,469
53,029
49,271
40,548
60,469
49,763
64,948
56,957
–
2,467
186
1,457
441
2,183
484
1,499
–
–
–
–
–
–
–
–
2021
167,204
2020
352,083
5,182
12,183
13,790
27,031
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
179,167
– 200,896
179,167
200,896
– 594,448 594,448
651,477
–
651,477
–
–
–
–
–
–
–
–
–
–
60,469
55,496
49,457
42,005
60,910
51,946
65,432
58,456
60,469
55,496
49,457
42,005
60,910
51,946
65,432
58,456
186,176
186,177
391,297
391,297
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1. As a result of the Covid-19 pandemic, salaries/fees were voluntarily reduced by 25% from April 2020 to September 2020 with the exception of
Nick Gresham, whose salary was reduced by 25% between April 2020 to June 2020.
2. Benefits include a car allowance, medical insurance and expenses in relation to the performance of duties.
3. Pension contributions reduced from 7.5% to 4% effective 1 April 2021 and are paid in the form of a cash allowance.
4. Peter Williams stepped down as Chair on 29 April 2021. Peter Sjölander was appointed Chair on 29 April 2021.
5. Julian Dunkerton was appointed as Interim Chief Executive Officer on 2 April 2019. As per the announcement on 16 December 2020, he assumed
the title of Chief Executive Officer from this date and was made permanent.
6. Stepped down on 15 October 2020, cessation of employment on 15 January 2021 and final pay in January 2021. Details of his termination arrangements
are set out in the Payments for loss of office section below. Benedict Smith was contracted as Interim Chief Financial Officer by Superdry from
November 2020 to June 2021 but was not appointed as a Board Director.
Annual bonus for the year ended 24 April 2021 (audited)
For FY21, no bonus operated and therefore no bonus targets were set or payments awarded.
Vesting of PSP awards (audited)
The PSP awards granted on 25 July 2018 are based on a three-year performance period ending 25 July 2021. No current
Executive Director is a participant in the 2018 PSP award and awards held by below Board employees will lapse as follows:
Metric
Performance condition
Earnings per
share (70%)
Total shareholder
return (30%)
25% of this part vests for average annual EPS growth of
8% in excess of RPI, increasing on a straight-line basis to
100% of this part vesting for EPS growth of at least 12%
per annum.
25% of this part of the award vests if the Group’s TSR is
ranked at the median of the comparator companies,
increasing on a straight-line basis to 100% vesting of this
part if the Group’s TSR is ranked at the upper quartile of the
comparator group (comprising FTSE All-Share companies
in the following subsectors: Apparel Retailers, Broadline
Retailers, Clothing and Accessories, Furnishings, Home
Improvement Retailers, Speciality Retailers and Toys).
Threshold
target (p.a.)
Stretch
target (p.a.)
8%
12%
Actual
% Vesting
Below
threshold
0%
(max. 70%)
Median
Upper
quartile
Below
median
0%
(max. 30%)
Vesting %
0%
119
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Share awards granted in the year (audited)
No PSP awards were awarded to Executive Directors in the financial years 2020 or 2021.
Directors’ interests in share awards (audited)
There are no outstanding share awards for Julian Dunkerton or Shaun Wills.
Share ownership (audited)
The beneficial and non-beneficial interests of the Directors in the share capital of Superdry at 24 April 2021 are set out below.
24 April 2021
25 April 2020
Shareholding
guideline %
% against
salary
Guideline
met?
Deferred
shares
PSP
SAYE
BAYE
Total
Interests in shares
Executive Directors
Julian Dunkerton
Non-Executive Directors
Faisal Galaria
Georgina Harvey
Alastair Miller
Helen Weir
Peter Williams
Former Executive Directors
Nick Gresham
16,651,435
15,172,105
200% 7,965%1
Yes
–
–
20,000
5,000
77,222
–
–
–
5,000
27,222
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
16,651,435
–
–
20,000
5,000
77,222
809
809
1. Calculation based on the share price as of 23 April 2021 (287p).
Executive Board Director leavers (audited)
Payments to past Directors
Euan Sutherland, who resigned as Chief Executive Officer
on 2 April 2019 and left employment on 31 December 2019,
remained entitled to benefit from one deferred bonus share
plan award granted in 2017. As such, 23,066 shares vested
on 20 July 2020 (the value at vesting was £28,141).
Payments to former Directors in FY21
Nick Gresham stepped down as Chief Financial Officer on
15 October 2020 and left employment on 15 January 2021.
In respect of FY21 Nick received £167,204 in basic salary,
£5,182 in taxable benefits and £13,790 in pension
contributions. Between stepping down from the Board and
cessation of employment in January 2021, Nick received
£82,795 in basic salary, £2,372 in taxable benefits and
£6,210 in pension contributions. Nick also received pay
in lieu of notice for the remaining three months of his notice
period in January 2021 equivalent to £99,999 and £20,000
in respect of outplacement support. His one outstanding
PSP award granted in 2019 over 143,885 shares lapsed
upon resignation.
Peter Williams resigned as a Non-Executive Director on
29 April 2021 (i.e. just after the financial year end). His fees
were paid up to and including 28 April 2021 and no further
payments were made in connection with his resignation
from office.
The following sections of the Annual Report and Financial
Statements are unaudited.
Relative importance of the spend on pay
(unaudited)
The following table sets out the percentage change
in distributions to shareholders and employee
remuneration costs.
Employee remuneration costs (£m)
Ordinary dividends (£m)
Special dividends (£m)
2021
81.9
0
0
2020
103.7
0
0
Change
(-21)%
0%
0%
120
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
CEO pay ratio (unaudited)
Under disclosure legislation, we are required to calculate
and publish our CEO pay ratio on an annual basis. The table
below shows how the CEO’s single figure remuneration
for financial year 2021 compares to equivalent single figure
remuneration for full-time equivalent UK employees, ranked
at the 25th, 50th and 75th percentile on total remuneration.
For the calculation method, Option A was chosen
(based on data as at 24 April 2021) as this was considered
to be the most robust approach to calculating the ratios.
Option A involves calculating the actual full-time employment
remuneration for all relevant employees for the fiscal year in
question. These values are then listed in order from lowest
to highest and the values at the three percentile points
are identified.
Year
2020
2021
Method
Option A
Option A*
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
43:1
36:1
38:1
34:1
28:1
23:1
Total remuneration
* CEO salary includes a 25% reduction in salary as at 24 April 2021.
The underlying data for salary and total remuneration as of 24 April 2021 is as follows:
Year
2020
2021
Salary
Total remuneration
25th percentile
Median
75th percentile
25th percentile
Median
75th percentile
£15,015
£16,302
£16,770
£17,374
£22,252
£24,999
£15,015
£16,302
£17,261
£17,491
£23,077
£25,996
The Superdry Remuneration Committee believes in reward
packages that are competitive and balanced against the
wider workforce aligned to our principles. On the permanent
appointment of Julian to the role of CEO in December 2020,
thorough benchmarking was conducted to ensure the
package was competitive yet consistent with the pay and
reward opportunities of other CEOs. The CEO in Superdry is
the employee with the highest level of pay because he has
the highest level of responsibility. Although the CEO ratio
is likely to vary, no bonus was payable in FY20 and no
bonus scheme was set in FY21. In addition, Julian has not
previously participated in the PSP meaning that the ratio
may be lower than it could be in future years given the
Committee’s proposal to award Restricted Shares to
Executive Directors in FY22.
The Committee considers that the median CEO pay ratio
is representative of the UK employee base. During FY21
there has been no increase to Julian Dunkerton’s salary
even following his appointment to the role of permanent
CEO on 16 December 2020 and there was no Group-wide
pay increases awarded. However, there have been a number
of changes to the workforce organisation resulting in a small
number of exceptional pay changes which have led to a
positive change in the 25% and 75% percentile of the CEO
pay ratio. The positive year-on-year change to the median
ratio is primarily due to the CEO’s voluntary salary reduction
(a 25% reduction taken from April 2020 to September 2020).
Percentage change in remuneration (unaudited)
The table below shows the percentage change in salary or
fees, benefits and annual bonus earned between FY20 and
FY21 for the Board, compared to the average earnings of all
of the Group’s employees.
Chairman
Peter Williams
Executive Directors
Julian Dunkerton
Nick Gresham*
Non-Executive Directors
Alastair Miller
Faisal Galaria
Georgina Harvey
Helen Weir
Employee population
Base salary/fee
Benefits
Annual bonus
-12%1
-12%1
-10%2
-12%1
-12%1
-12%1
-12%1
0.26%3
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
* Stepped down during FY21.
1. 25% reduction to salary for five months during the period May 2020 – September 2020.
2. 25% reduction to salary for three months during the period May 2020 – July 2020 based on a pro-rata salary from May 2020 – 16 October 2020.
3. There was no official annual pay review conducted by Superdry in 2021 and this number refers to a small number of exceptional pay changes of
employees in Head Office.
121
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Gender Pay Gap Report (unaudited)
The annual sharing of our Gender Pay Gap Report provides
further insight and is being used to actively enhance our
internal diversity conversation. Like many organisations we
currently have a gender pay gap, which we would, of course,
aspire not to have and we have a robust and transparent
action plan to make inroads into this which we shared with
colleagues following consultation in December 2020.
The Committee recognises that the gender pay measures
are very different from equal pay comparisons and is
confident that our Group-wide approach to pay means that
we do not allow unequal pay to exist within Superdry. The
Committee has concluded that the Superdry gender pay gap
demonstrates that, as our most senior roles are largely filled
by men, we need to continue to improve diversity in our
most senior job levels and execute on our diversity plan
that we have shared with colleague stakeholder groups.
To support this, we have recently set three and five-year
targets for gender and ethnic diversity at Board, Executive
Committee and senior leadership level, which are detailed in
our Our People report on page 48.
Our full report on gender pay is available at corporate.
superdry.com. Further detail on our approach to diversity
and diversity data can be found in the Our People and
Governance sections.
Performance graph (unaudited)
The graph below shows the total shareholder return
for the Group compared with the TSR of the FTSE 250
(excluding Investment Trusts) and FTSE SmallCap
(excluding Investment Trusts) over the 10 years to 24 April
2021. The FTSE 250 and SmallCap indexes were selected
as Superdry was a constituent of one or the other of them
for the period shown.
Total Shareholder Return
Source: Refinitiv Eikon Datastream
300
250
200
150
100
50
5/1/2011
4/29/2012
4/28/2013
4/26/2014
4/25/2015
4/30/2016
4/29/2017
4/28/2018
4/27/2019
4/25/2020
4/24/2021
■
Superdry
■
FTSE Small Cap ex Investment Trust
■
FTSE 250 ex Investment Trust
Historic single figure table (audited)
The table below sets out the Chief Executive Officer’s single figure remuneration over the past 10 years.
Year ended
2021
2020
2019
2019
2018
2017
2016
2015
2015
2014
2013
2012
Total
remuneration
Annual bonus
(% of max)
Chief Executive Officer
Julian Dunkerton*
Julian Dunkerton*
Julian Dunkerton*
Euan Sutherland†
£594,448
£651,477
£50,246
£809,196
Euan Sutherland†
£2,662,526
Euan Sutherland†
£4,000,708
Euan Sutherland†
Euan Sutherland†
Julian Dunkerton*
Julian Dunkerton*
Julian Dunkerton*
Julian Dunkerton*
£1,677,125
£602,862
£419,180
£419,412
£419,406
£419,463
Long-term
incentives
(% of max)
n/a
n/a
n/a
0%
100%
58.2%
n/a
n/a
n/a
n/a
n/a
n/a
0%
0%
n/a
0%
65.5%
96.1%
85.0%
33.3%
–
–
–
–
* Julian Dunkerton was appointed Interim Chief Executive Officer on 2 April 2019 and assumed the title of Chief Executive Officer on a permanent basis
from 16 December 2020.
† Euan Sutherland was appointed Group Chief Executive Officer on 22 October 2014 and stepped down on 2 April 2019. His 2018 total remuneration
figure has been updated to reflect the actual value of his 2015 PSP awards which vested in August 2018.
122
Superdry plc Annual Report 2021 Governance → Directors’ Remuneration Report
Advisers to the Committee
FIT Remuneration Consultants LLP were retained as the Committee’s independent remuneration adviser for FY21. Fees
charged by FIT on the basis of time and materials for remuneration advice amounted to £50,696 (ex VAT). No other services
were provided by FIT to the Group during the year. The Committee is satisfied that the advice provided was independent.
FIT is a member of the Remuneration Consultants Group and complies with its code of conduct.
Dilution
The current dilution against the 10% in 10-year share plan limit for employee and Executive share programmes is 7.1%.
Statement of shareholder voting
Shareholder voting in respect of the Directors’ Remuneration Policy (last approved at the 2020 AGM) and last year’s Annual
Report on Remuneration received the following votes from shareholders:
Directors’ Remuneration Policy (2020 AGM)
Total number of votes
% of votes cast
Directors’ Remuneration Report (2020 AGM)
Total number of votes
% of votes cast
For
Against
Votes withheld
43,651,563
1,504,695
2,408
96.67
3.33
45,002,312
153,589
2,765
99.66
0.34
The Annual Statement and Directors’ Remuneration Report, excluding the Directors’ Remuneration Policy, will be subject to an
advisory vote at the 2021 AGM.
Georgina Harvey
Remuneration Committee Chair
15 September 2021
123
Superdry plc Annual Report 2021 Governance → Directors’ Report
Directors’ Report
We present the Directors’ Report for Superdry plc and
subsidiary companies (together, the ‘Group’s’) audited
financial statements for FY21. This Directors’ Report
includes the information required by the Companies Act
2006, but where information is provided in other parts of this
Annual Report, you will be referred to the relevant page(s).
The Corporate Governance Report is on pages 86 to 92 and
forms part of this Directors’ Report.
Superdry is UK domiciled but has a number of overseas
subsidiaries and has branches in Austria, Italy, Norway,
Portugal and Switzerland.
This Directors’ Report and the Strategic Report on pages 3
to 83, comprise the ‘management report’ for the purposes of
the Financial Conduct Authority’s Disclosure and
Transparency Rules (DTR 4.1.8R). The management report
includes an indication of likely future developments for
Superdry.
Results and dividends
Our financial statements for FY21 are on pages 129 to 200.
No interim dividends were paid to shareholders during the
period. The Directors do not recommend the payment of a
final dividend in respect of FY21.
Significant events since the end of the
financial year
Details of significant events since the balance sheet date
are contained in note 38 to the financial statements. An
indication of likely future developments in the business of
the Group are included in the Strategic Report on page 80.
Covid-19 pandemic
The impact of the Covid-19 pandemic on our business and
its operations in FY21 and the mitigation of the risks arising
from it are disclosed in our statement on page 20, in the CFO
Review on pages 75 to 83 and in ‘How We Manage Our
Risks’ on page 56.
Risk management and internal controls
A description of the principal risks facing the business,
emerging risks and the Group’s approach to managing those
risks is on pages 56 to 66 in ‘How We Manage Our Risks’.
Further information on the Group’s system of internal
controls and the review of those controls can also be
found in that section and in the Audit Committee
Report on page 101.
Financial risk management, policy
and objectives
For further information regarding financial risk
management, policy, objectives, the use of financial
instruments and hedging policy, please refer to note 34
to the financial statements.
Approach to taxation and taxation governance
Our tax strategy seeks to ensure that the approach taken to
our tax affairs is aligned with the high standards of corporate
governance set by our Board, to promote the interests of our
investors, customers, colleagues and other stakeholders. We
have a responsibility to pay the amount of tax legally due
in any country in accordance with the rules set by the
relevant government.
The Group’s tax strategy is determined by the Board and
is reviewed on an annual basis by the Audit Committee.
Operational responsibility for the tax strategy rests with
the CFO. The tax strategy is published on our website at
corporate.superdry.com.
The Audit Committee considers taxation risks as any risks
which manifest themselves, or when they are identified by
the Group’s risk management framework. Where risks are
reviewed, actions are agreed to mitigate them or to eliminate
them, if possible. Internal controls are in place and these are
subject to periodic internal audits.
Share capital, control and restrictions on
voting rights
Details of our issued share capital are shown in note 35 to
the financial statements on page 195.
We have one class of ordinary shares which carry no right
to fixed income. Each share carries the right to one vote at
general meetings. The ordinary shares are listed on the
Official List and traded on the London Stock Exchange.
There are no restrictions on the transfer of ordinary shares
other than:
• certain restrictions which may from time to time be
imposed by laws and regulations (for example,
insider dealing);
• pursuant to the Listing Rules of the Financial Conduct
Authority and Superdry’s share dealing code whereby
certain employees of the Group require approval to deal
in its ordinary shares; and
• a letter of understanding in favour of the Group, under
which Julian Dunkerton agreed not to sell, dispose of or
otherwise deal with (other than in the course of ordinary
exceptions) his shareholding for a period expiring on
1 April 2021.
We are not aware of any arrangements between
shareholders that may result in restrictions on the transfer
of securities and/or voting rights.
The rules relating to the appointment and replacement of
the Directors are contained in our Articles of Association.
Any specific rules regarding the election and re-election
of Directors are referred to in the Corporate Governance
Report on pages 87 to 92. Changes to the Articles
of Association must be approved by our shareholders.
124
Superdry plc Annual Report 2021 Governance → Directors’ Report
Notifiable interests in issued share capital
Please note that the below holdings that were notified to us
after the FY21 year end may have changed since they were
reported to us. Notification of any further changes are not
required until a further threshold is crossed.
Notifications received from 24 April 2021 to 15 September 2021
No of voting rights
at date of notification
% of voting rights
at date of notification
Nature of holding
Date of notification
Gatemore Capital Management LLP as manager
for Gatemore Special Opportunities Master Fund Ltd
Gatemore Capital Management LLP as manager
for Gatemore Special Opportunities Master Fund Ltd
4,467,959
3,578,363
5.45%
4.36%
Direct &
Indirect
Direct
22 March 2021
5 May 2021
(Amendment to
22 March 2021)
Share buy backs
The Group proposes to renew the authority granted by
shareholders at the AGM in 2020, to repurchase up to 10%
of its issued share capital.
Share schemes
The Group presently operates three employee share
schemes: Restricted Share Awards (RSAs), Save As You
Earn (SAYE) and Buy As You Earn (BAYE). All shares allotted
under these share schemes have the same rights as those
already issued.
Under the BAYE share scheme, employees are entitled
to acquire shares. These shares are held in trust by
Computershare Trustees (the Trustees). Voting rights
are exercised by the Trustees on receipt of participants’
instructions. If a participant does not submit an instruction to
the Trustees, no vote is registered. In addition, the Trustees
do not vote on any unawarded shares held under the BAYE
scheme as surplus assets. The Trustees have also elected to
waive dividends on any unawarded shares held under trust
relating to dividends payable during the year. As at 24 April
2021, the Trustees had no unawarded shares held in trust.
Superdry’s Employee Benefit Trust (the Trust) has also
waived all dividends payable in respect of the ordinary
shares held by it. As of 24 April 2021, one share was
held by the Trust.
Founder Share Plan
The Founder Share Plan (FSP), established on 12 September
2017 by Julian Dunkerton and James Holder, did not mature,
as the market value of Superdry’s shares on the maturity
date of 30 September 2020 did not achieve the value
stipulated in the FSP agreement. No shares will be granted,
and the scheme will expire on 30 September 2022.
Directors and Directors’ interests
Details of the Directors as at the date of this report can be
found on pages 84 to 85. Details of Directors who served
during FY21 can be found in the Corporate Governance
Report on page 89.
The interests of the Directors and their closely associated
persons in the share capital as of 24 April 2021, along with
the details of Directors’ share awards, are contained in the
Directors’ Remuneration Report on pages 104 to 123.
No Director has any other interest in any shares or loan stock
of any Group company or was, or is, materially interested in
any contract, other than his or her service contract, which
was subsisting during or existing at the year end and which
was significant in relation to the Group’s business.
Details of Director indemnity provisions can be found in the
Corporate Governance Report on page 92.
Related party transactions
Details of related party transactions can be found in note 21
on page 178 of the financial statements. For details of
Directors’ service contracts please refer to page 115 in
the Directors’ Remuneration Report.
UK Code of Corporate Governance statement
Our statement can be found in the Corporate Governance
Report on page 86.
The Takeover Directive
The rights and obligations attached to the issued share
capital are set out in the Articles of Association, which
are available at corporate.superdry.com.
At the AGM in 2020, shareholders approved resolutions
authorising the Group to:
• allot shares up to an aggregate nominal value of
£1,367,128 (representing one third of our issued share
capital as of 22 September 2020);
• approve the disapplication of pre-emption rights for cash
issues of shares in respect of ordinary shares with a nominal
value of £205,069 (representing approximately 5% of our
issued share capital as of 22 September 2020); and
• approve an additional authority, following changes
in The Pre-Emption Group’s Statement of Principles,
which provided that an allotment of up to an additional
5% of our issued share capital may also be made on a
non-pre-emptive basis if that allotment was used only
for the purposes of financing a transaction which the
Board determined to be an acquisition or other capital
investment (within the meaning of The Pre-Emption
Group’s Statement of Principles).
Resolutions will be proposed at this year’s AGM to renew
these authorities. Further details are set out in the ‘Notice
of AGM’ on page 202.
125
Superdry plc Annual Report 2021 Governance → Directors’ Report
Health and safety
The Group is committed to providing a safe and healthy
environment to all of its employees, customers, suppliers
and partners. Practices and policies are regularly reviewed
to ensure that our approach to health and safety, training,
risk assessments, safe systems of working and accident
reporting remain appropriate. For further information on
internal audit please see page 102 and for risk management,
please see pages 56 to 66.
Legal and regulatory compliance
The Legal Team is responsible for identifying and carrying
out assessments of those areas of the business where
material legal and regulatory risks may be present.
We continue to increase our controls on the use of standard
agreements to achieve greater consistency and protection
where we license and franchise our brand.
We continue to train and advise the organisation
with respect to our obligations under data protection,
competition, anti-bribery and corruption and other applicable
laws. We are also continually reviewing our intellectual
property portfolio in light of our strategy for growth and
have made, and will continue to make, further registrations
to ensure that our protection is robust.
Where issues are identified, mitigating actions are built
into a plan involving the drafting and communication of
policies and the delivery of training where appropriate, or
are approached by way of a revision to key contractual
terms. The Board receives regular reports on material
litigation and the legal action taken to support our strategy.
The Audit Committee reviews the effectiveness of the
internal controls framework on an annual basis.
A confidential whistleblowing line is in place, is managed
through an independent third party provider, and covers all
countries in which we operate. Information on how to use our
whistleblowing line is available to all colleagues. All matters
arising from the use of the whistleblowing line are referred
to the Company Secretarial Team and investigated by the
Human Resources Team. The Audit Committee receives a
summary of all matters arising through the whistleblowing
line on an annual basis – for more information please turn
to page 103.
Greenhouse gas emissions, energy
consumption and energy efficiency action
Please refer to the tables on pages 41 and 42 of the
Sustainability Report. The proportion of carbon dioxide
emissions reported that relates to the United Kingdom and
offshore area is 42.3% (location-based) and 27.8% (market-
based). The proportion of energy consumption reported that
relates to the United Kingdom and offshore area is 45.9%.
Anti-bribery and corruption
The Group has an Anti-Bribery and Corruption Policy (ABC
Policy) in place which is reviewed regularly by the Board. The
ABC Policy was reviewed, updated and approved in July
2020 and in July 2021. The ABC Policy sets out the legal
obligations and responsibilities of employees in relation to
anti-bribery and corruption law, including decision trees for
employees in relation to gifts and hospitality. A gift register is
in place and colleagues must report and seek permission to
accept gifts and hospitality over a prescribed financial value.
The gift register is reviewed by the Audit Committee on an
annual basis. Anti-bribery and corruption training is
mandatory for all colleagues. Guidance is provided to
colleagues, along with information on how to manage these
risks. ABC Policy information and compliance requirements
are incorporated into our Supplier Manual and in our
contractual arrangements with our partners. Annual supplier
independent audits are used to ensure compliance with our
Ethical Trading Code of Practice, and we have strong
escalation routes upon breach of our ABC Policy. A Board
approved and Group-wide Code of Conduct is in place and is
also reviewed by the Audit Committee on an annual basis.
Any suspected incidents of fraud are escalated to our Legal
and Risk Teams for immediate investigation and action, and
any confirmed incidents of fraud are reported to the Board
on an annual basis (or more frequently if necessary). No such
incidents have been identified in FY21. There have been no
reported incidents in relation to the ABC Policy in FY21.
Controls associated with our ABC Policy have been captured
within our Internal Controls Framework and assurance over
their operational effectiveness will be provided as part of the
ongoing embedding of this framework. For whistleblowing,
please see above.
Political donations
No political donations or political expenditure have been
made by the Group during this financial year.
126
Superdry plc Annual Report 2021 Governance → Directors’ Report
Location of disclosures
The table below sets out the location of disclosures that have been incorporated into the Directors’ Report by reference,
including those required by LR 9.8.4:
Disclosure
Allotment of equity securities
Annual General Meeting
Business relationships with suppliers, customers and others
Corporate Governance Report (including the reports of each Committee of the Board)
Directors’ interests
Directors’ statement of responsibility
Disability – fair treatment
Diversity and Inclusion Policy
Emoluments (Directors’)
Employee participation in share schemes
Employee engagement and communication
Environment
Financial instruments and financial risk management
Financial Review
Going concern and viability statement
Internal controls
Key Performance Indicators
Long-term incentive plans
People
Related party transactions
Risk management
Share capital
Sustainability
Page
146
202
161
87
120
127
51
51
118
114
53
40
190
75
83
101
128
165
48
178
56
195
40
Non-Financial Information Statement
In accordance with Companies Act 2006 sections 414 (CA)
and (CB), a non-financial information statement can be
found in the Strategic Report on page 67, which sets out
non-financial information reporting requirements and
their locations.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report
(including the Directors’ Report) and the financial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group
financial statements for each financial year. Under that
law, the Directors have prepared the Group and Company
financial statements in accordance with international
accounting standards in conformity with the requirements
of the Companies Act 2006, and International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union. Under
company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and its profit
or loss for that period. In preparing each of the Group and
Company financial statements, the Directors are required to:
• properly select and apply accounting policies;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRS Standards are insufficient
to enable users to understand the impact of particular
transactions, other events and conditions on the entity’s
financial position and financial performance; and
• assess the Group’s ability to continue as a going concern.
127
Superdry plc Annual Report 2021 Governance → Directors’ Report
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s transactions and disclose, with reasonable
accuracy, at any time, the financial position of the Group and
enable them to ensure that the financial statements comply
with the Companies Act 2006 and as regards the Group
financial statements, Article 4 of the IAS Regulation. They
are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard
the assets of the Group, and hence, for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report, directors’ report,
directors’ remuneration report and corporate governance
statement that comply with law and regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Group’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are
listed on pages 84 to 85, confirms that to the best of
their knowledge:
• the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair
view of the assets, liabilities, financial position and profit
or loss of the Group and the undertakings included in the
consolidation taken as a whole;
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Group, and the undertakings included in the
consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face; and
• the Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess
the Group’s position, performance, business model
and strategy.
Statement on disclosure of information
to auditors
The Directors confirm that, so far as each is aware, there
is no relevant audit information of which the auditors are
unaware. Each of the Directors has taken all the steps he
or she should have taken as a director to make himself or
herself aware of any relevant audit information, and to
establish that the auditors are aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of section 148 of the
Companies Act 2006.
AGM
The AGM will be held on 22 October 2021 at 10.00am. The
notice of AGM is on page 202 of this report and is available
at corporate.superdry.com.
Ruth Daniels
Company Secretary
15 September 2021
Registered office:
Unit 60, The Runnings, Cheltenham,
Gloucestershire GL51 9NW
Registered in England and Wales,
registered number 07063562
128
Superdry plc Annual Report 2021 2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit
of the financial statements section of our report.
We are independent of the Group and the parent Company
in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including
the Financial Reporting Council’s (the ‘FRC’s’) Ethical
Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements. The non-audit services provided to
the Group and parent Company for the 52 week period are
disclosed in note 10 to the financial statements. We confirm
that the non-audit services prohibited by the FRC’s
Ethical Standard were not provided to the Group or
the parent Company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Our Financials → Independent Auditor’s Report
Independent Auditor’s Report
to the members of Superdry plc
Report on the audit of the financial statements
1. Opinion
In our opinion:
• the financial statements of Superdry plc (the ‘parent
Company’) and its subsidiaries (the ‘Group’) give a true
and fair view of the state of the Group’s and of the
parent Company’s affairs as at 24 April 2021 and of
the Group’s loss for the 52 week period then ended;
• the Group financial statements have been properly
prepared in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006 and International Financial
Reporting Standards (IFRSs) as adopted by the
European Union;
• the parent Company financial statements have been
properly prepared in accordance with international
accounting standards in conformity with the
requirements of the Companies Act 2006; and
• the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements which comprise:
• the Group Statement of Comprehensive Income;
• the Group and parent Company Balance Sheets;
• the Group and parent Company Statements of Changes
in Equity;
• the Group and parent Company Cash Flow
Statements; and
• the related notes 1 to 39.
The financial reporting framework that has been applied in
their preparation is applicable law, international accounting
standards in conformity with the requirements of the
Companies Act 2006, and IFRSs as adopted by the
European Union. The financial reporting framework that
has been applied in the preparation of the parent Company
financial statements is applicable law and international
accounting standards in conformity with the requirements
of the Companies Act 2006.
129
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
• Impact of control deficiencies;
• Going concern;
• Store asset impairment and onerous property related contract provision;
• Inventory provision; and
• Wholesale and other trade debtor recoverability.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used for the Group financial statements was £3.0m, which was determined
with reference to 0.5% of Group revenue. Given the continued volatility in performance during the
year, Group revenue was considered the most appropriate performance measure on which to base
materiality. Revenue was also used to determine materiality in the prior year.
£3.0m represents approximately 8% of Group statutory loss before tax and 3% of Group net assets.
Scoping
We focused our Group audit scope primarily on the audit work at 9 components. These components
represent the principal business units and account for 91% of the Group’s net assets, 94% of the
Group’s revenue and 95% of the Group’s loss before tax.
Significant changes
in our approach
Our audit approach has been designed to respond to the risks within the retail environment and the
impact of coronavirus on the Group’s trading performance.
We have also designed our audit in light of the Group’s control environment and our findings from the
prior year audit. As part of our response to the control deficiencies, we have increased our audit scope
and have, therefore, performed full scope audits on the German, Austrian, and Belgian components in
the current year compared to specified audit procedures in the prior year. As a result, full scope audits
have been performed on 7 components (FY20: 4) and specified audit procedures performed on 2
components (FY20: 5). More details on the impact the Group’s ongoing control deficiencies have
had on our audit approach are set out in the ‘impact of control deficiencies’ key audit matter below.
The following were identified as key audit matters in FY20, which are not identified as such in FY21:
• Calculation of right-of-use asset and liability in the opening balance sheet upon adoption of IFRS 16
‘Leases’: this is no longer a key audit matter as the risk related to the initial adoption of IFRS 16,
which was a prior year matter.
• Classification and disclosure of adjusted and other items: this is no longer a key audit matter as
the size and nature of adjusted and other items has reduced meaning that the level of judgement
associated with classifying items as adjusted has decreased.
• Parent Company investment in subsidiaries and expected credit losses on intercompany loans:
this is no longer a key audit matter as the Group’s market capitalisation is greater than the parent
Company’s net assets. Furthermore, there has been no significant change to the credit risk of the
parent Company’s counterparties, meaning no significant change in expected credit loss on
intercompany balances.
130
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the
Company’s ability to continue to adopt the going concern
basis of accounting is discussed in section 5.2.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Group’s and parent Company’s
ability to continue as a going concern for a period of at
least twelve months from when the financial statements
are authorised for issue.
In relation to the reporting on how the Group has applied the
UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the Directors’
statement in the financial statements about whether the
Directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
131
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
5.1. Impact of control deficiencies
Key audit matter
description
As discussed in the Audit Committee Report on page 101, management implemented a controls
improvement project in FY20 to improve the financial control environment. This project remained
ongoing at the year-end.
How the scope of
our audit responded
to the key audit
matter
The controls improvement project was designed to respond, in part, to the control issues identified
during the FY20 external audit. The nature of these issues primarily related to the management review
controls, balance sheet reconciliations and transactional processing controls (particularly in accounts
payable). In addition, general IT control deficiencies relating to access, segregation of duties and
change management controls were also identified. These matters were included in our FY20 audit
report, together with the additional audit work undertaken. In FY21 we note that progress has been
made in addressing some of these issues – specifically in relation to transactional processing controls
within accounts payable.
In FY21 a further issue was identified regarding the management review controls and clarity of support
for the Group’s Coronavirus Job Retention Scheme (‘CJRS’) claim in the UK for which material claims
of £8m were made in the year. Since the year end, management has engaged a third party to assist in
addressing the issues identified. In addition, improvements are required in relation to the Group’s
accounting for IFRS 16 ’Leases’ and specifically the process and controls over how the IFRS
accounting adjustments are recorded in the Group consolidation.
The Group’s initial target date of December 2020 to remediate the FY20 control issues was not met,
in part due to the limited time available to embed the changes between finalising the FY20 audit and
planning for the FY21 year-end, exacerbated by the disruption caused by Covid-19. As a result, the
Company’s focus in the second half of FY21 has been to ensure improvements to the FY21 year-end
close. Priority has been given to remediating key balance sheet controls around inventory, accounts
payable, cash, and the month end close and review processes.
Whilst fewer than in the previous year, a number of misstatements have been identified during the
FY21 audit. In aggregate, the errors identified were material. These have subsequently been corrected
by management. The misstatements identified are indicative of the ongoing control issues within the
Group as highlighted above. The control environment will continue to be a significant area of focus
for the Audit Committee in the forthcoming year as discussed in its Report on page 101.
We adopted a fully substantive audit approach, with no reliance on internal controls.
In order to respond to the pervasive risks arising from the deficiencies in the control environment we
modified the nature, extent and timing of our audit procedures. Specifically:
• we increased our audit scope and performed full scope audits on the German, Austrian, and Belgium
components compared to specified audit procedures on these components in the prior year. Full
scope audits have been performed on 7 components (FY20: 4) and specified audit procedures
performed on 2 components (FY20: 5). As a result, full scope audit procedures are performed
on 94% of the Group’s revenue, 95% loss before tax and 91% net assets.
• consistent with the prior year, we have used a lower performance materiality (being 60% of
materiality) than would be ordinarily used if the control environment were deemed effective.
This increased the volume of substantive testing completed (see section 6.2 below for our
materiality assessment).
• in response to the control deficiencies identified, we have elevated the risk assessment on a number
of transactional balances (including accounts payable, accruals, prepayments and trade debtors)
and have therefore performed increased sample testing.
• we have performed additional procedures to identify and address fraud risks, including the
involvement of our forensic specialists. We have performed targeted procedures in relation to
specific fraud risks, including the risk of management override of controls and the other areas as
set out in section 11.1 below. Where key audit matters include a risk of fraud, the risks identified
and procedures performed are detailed within the key audit matters 5.2 – 5.5 set out below.
• we assessed each of the control deficiencies identified by management as a result of its internal
controls remediation project and, where necessary, designed specific audit procedures to mitigate
the risks. We also held regular meetings with Internal Audit and the Finance Transformation Change
Lead throughout the period to understand the progress of management’s controls project and then
considered the implications for our audit.
132
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
5.1. Impact of control deficiencies continued
How the scope of
our audit responded
to the key audit
matter
Key observations
5.2 Going concern
Key audit matter
description
• senior members of the audit team have performed audit testing directly in the more complex areas
of accounting, including inventory variance accounting, accounts payable, IFRS 16, CJRS claims
and the audit of the Group’s consolidation.
• we involved data analytics in our testing, particularly with regards to revenue and inventory where
there are large volumes of transactional data. We have performed sample testing on the underlying
transactional data used in this analysis in order to confirm its completeness and accuracy, given the
IT control deficiencies noted above. We have used spreadsheet analysing tools to detect formula
errors and other anomalies. We have also engaged our modelling specialist to assist us in evaluating
the integrity of management’s Excel going concern and store impairment models.
• the extended reporting timetable has given us additional time to perform the incremental audit work
required. It has also enabled us to use a longer hindsight period to assess the appropriateness of
year end judgements.
• we re-assessed the nature and increased the extent of our testing of accounts payable compared
to the prior year, as a result of the transactional processing control deficiencies identified in
the previous audit. We have performed sample testing on a number of supplier statement
reconciliations and using data analytics to match post year-end payments to pre year-end liabilities.
• we engaged our internal employee tax specialists to recalculate a sample of CJRS claims made
during the year and assessed whether the CJRS rules were appropriately applied.
Whilst some improvements have been made to the control environment over the year, there are still
a number of significant improvements that need to be made in order to improve the accuracy and
completeness of the underlying accounting records and reduce the number of misstatements
identified. We appropriately increased the scope of our audit procedures to address the
risks identified.
The Group was in a net cash position of £38.9m (FY20: £36.7m) at the year-end and, due to the
implementation of strong cash management measures, maintained a cash balance in excess of
£20m throughout FY21, despite the impact of the pandemic.
In August 2020, the Group refinanced its facilities moving from a Revolving Credit Facility of £70m
(expiring in January 2022) to a new Asset Backed Lending (“ABL”) facility of up to £70m. The ABL
is subject to a number of covenants which were renegotiated in both January and July 2021 due to
the trading pressures from unforeseen second lockdowns in the UK and globally. The ABL expires in
January 2023, with the option of the lender to extend for a further 12 months. In addition, the Group
has an un-committed overdraft of up to £10m available on a rolling annual basis. The ABL was
undrawn by the Group during FY21.
The ABL’s covenants are tested quarterly and are based around the Group’s adjusted earnings before
interest, tax, depreciation, amortisation and rent (“EBITDAR”) (calculated on frozen accounting
standards) up to the end of Q2 2022 and fixed charge (rent and interest) cover thereafter.
The medium-term plan continues to be used as the basis for management’s going concern
assessment. In using these financial forecasts significant judgement was required to decide what
assumptions to make regarding the impact of the coronavirus pandemic on the retail sector and
wider economy, and specifically to Superdry, and the ability to execute the turnaround plans required
to recover brand health and return the business to profitable growth. Consequently, there remains
more uncertainty than would usually be the case in making the key judgements and assumptions
that underpin the financial forecasts for the business. The EBITDAR covenant is with reference to an
absolute level of profit, rather than a ratio. Consequently, it is most sensitive to the macroeconomic
recovery and performance of the Group over the going concern period.
Management’s Base Case forecast indicates that the banking covenants will be met throughout the
going concern period and with no requirement to drawdown on the ABL facility. The Group expects
to be cash positive during the year with substantial liquidity maintained throughout the going concern
period. Under the reverse stress test, which tests for the breakeven point against borrowing facilities
(liquidity and covenants are tested separately), the July 2022 (Q2 23) covenant test would breach first.
Management considers the revenue shortfall required to cause this breach to be remote.
The Audit Committee has included the adoption of the going concern basis of accounting as a key risk
on page 99. See also management’s going concern disclosures on pages 81 to 83.
133
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
5.2 Going concern continued
How the scope of
our audit responded
to the key audit
matter
We obtained a detailed understanding of the relevant controls that the Group has established
regarding the drafting, review and approval of the Group’s going concern assessment.
In addition, we have performed the following procedures:
• engaged modelling specialists to perform testing on the mechanical accuracy of the model used to
prepare the Group’s cash flow forecast;
• evaluated the consistency of management’s forecasts with other areas of the audit, including the
store impairment review;
• challenged the key assumptions within the going concern assessment including the key
assumptions in the Group’s brand reset strategy which relate to revenue and gross margin
growth and the ability of the Group to achieve estimated cost savings. We have challenged with
reference to the historical trading performance, current trading uncertainty, market expectations
and peer comparison;
• engaged our internal restructuring specialists to assist us in challenging the working capital
assumptions within the going concern model;
• obtained an understanding of the financing facilities available to the Group, including repayment
terms and covenants;
• assessed the impact of reverse stress testing on the Group’s funding position and
covenant calculations;
• assessed and challenged the mitigating actions available to management, should these be required
to offset the impact of the forecast performance not being achieved; and
• challenged the sufficiency of the Group’s disclosures over the going concern basis with reference
to our knowledge and understanding of the assumptions taken by management and recent
FRC guidance.
Key observations
From the work performed above, we are satisfied that the adoption of the going concern basis
of accounting and the disclosure in respect of Group’s ability to continue as a going concern
are appropriate.
5.3 Store asset impairment and onerous property related contract provision
Key audit matter
description
Under IAS 36 ‘Impairment of Assets’ the Group is required to complete an impairment review of its
store portfolio where there are indicators of impairment.
The net book value of the store assets and IFRS 16 right-of-use asset as at 24 April 2021 was £88.6m
(FY20: £118.6m). This is after the recording of a net impairment charge of £10.7m (FY20: £136.8m
charge), following the assessment that was undertaken during the year, of which £3.3m (FY20:
£15.6m) relates to the store assets and £7.4m (FY20: £121.2m) relates to the IFRS 16 right-of-use
asset. The net impairment charge relates to 177 stores (FY20: 177 stores). The £10.7m net impairment
charge comprises a £22.8m charge partially offset by a £12.1m release. The release includes £5.6m
specifically relating to the Regent Street store. An onerous property related contract charge of
£5.1m (FY20: £12.0m credit) has also been recognised.
The store impairment review involves management making several estimates to determine the value
in use of the stores (being the net present value of the forecast cash flows). This is then compared to
the book value of stores’ assets (including the right-of-use asset), to identify whether any impairment is
required. In making this assessment, management determines each store to be a cash generating unit.
Stores are also assessed to determine whether an onerous property related contract provision for
other property costs (e.g. service charge) is required. This includes those stores forecast to generate
a net loss over the remainder of the lease term. The provision represents the present value of
the estimated unavoidable property costs over the period of the remaining lease agreement,
excluding rental and other costs which are accounted for separately under IFRS 16 ‘Leases’.
134
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
5.3 Store asset impairment and onerous property related contract provision continued
Key audit matter
description
How the scope of
our audit responded
to the key audit
matter
The impairment model utilises the forecasts included in the Board’s medium-term plan (which covers
the periods up to April 2026) to calculate value in use. Assumptions beyond this period do not exceed
the local country growth rate. The medium-term plan reflects the Group’s turnaround strategy, first
implemented when Julian Dunkerton returned as CEO in April 2019. The implementation of this
strategy has been impacted by the coronavirus pandemic and hence is still in its early stages.
Consequently, there is uncertainty regarding the ability to achieve the forecast store performance.
Furthermore, the impact of coronavirus on the wider economy and customer shopping habits, plus
the challenging environment in the retail sector, add to this uncertainty.
The Board’s medium-term plan is prepared on a top down basis and not at an individual store level.
For the purpose of the impairment review, an exercise has therefore been performed to allocate the
forecast performance across the individual stores. Management’s approach in allocating forecast
performance across individual stores has changed since FY20, in order to better reflect its expectation
of how different types of stores will recover from the pandemic. This exercise involves a high level of
management judgement.
The key audit matter therefore relates to the appropriateness of management’s estimate of the future
trading performance of each store, as this is used to derive value in use. Value in use is calculated
from cash flow projections taken from the medium-term financial plan allocated to each store as
noted above and relies upon management’s assumptions and estimates of future trading performance
and allocation of direct costs and overheads to the stores. This involves management judgement.
Furthermore, the impairment and onerous property related contract model is complex and is prepared
using Excel spreadsheets which increases the scope for error.
Refer to notes 1 and 2 for the Group’s impairment accounting policies and the key assumptions used
in the impairment assessment, as well as the significant issues section of the Audit Committee Report.
Our audit focused on whether the judgements made by management in determining the store-based
asset impairments and onerous property related contract provisions were appropriate.
To respond to this key audit matter we have:
• obtained an understanding of the relevant controls around the impairment review and onerous
property related contract provisioning process, including the budget and forecast setting processes
which support the cash flow used within the impairment model (and going concern judgement);
• assessed the methodology applied in performing the impairment review and onerous provision
calculation, with reference to the requirements of IAS 36 ‘Impairment of Assets’ and IAS 37
‘Provisions’ respectively;
• assessed management’s revised process of allocating the top-down medium-term plan to the
individual store impairment review and challenged the judgements applied by analysing both historic
store performance data, current store performance, forecast retail trends and performing a search
for contradictory evidence;
• challenged the key assumptions utilised in the cash flow forecasts, in particular assumptions in
relation to the Group’s recovery from the coronavirus pandemic and future trading performance,
primarily in relation to revenue and gross margin growth, with reference to historical trading
performance, market expectations, and peer comparison;
• challenged the allocation of direct and other costs to stores by assessing the individual costs
against the criteria within IAS 36 and IAS 37;
• engaged our modelling specialists to assist in evaluating the integrity of the Excel model;
• assessed management’s sensitivity analysis in relation to the key assumptions used in the cash flow
forecasts; and
• evaluated the appropriateness of the Group’s disclosures regarding the store asset impairment and
the onerous contract provision.
135
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
5.3 Store asset impairment and onerous property related contract provision continued
Key observations
While a number of modelling improvements were identified and separately reported to management,
we are satisfied with the integrity of the model.
As set out above, the store impairment and onerous property related contract provision has required
significant management judgement. In particular, it requires the successful implementation of the
turnaround strategy which is still in its early stages and is in the context of a challenging retail sector
where the long-term impact of coronavirus on customer shopping habits is not yet known. The
impairment and onerous contract provision is underpinned by the assumption the decline in
store sales and profitability experienced in recent years is reversed over the medium term.
From the work performed above, we concluded that the level of impairment and onerous property
related contract provision recognised on the store estate is appropriate. Given the uncertainties noted,
the disclosure sensitivities in note 2 provide important information to assess the impact of a change in
key assumptions.
5.4 Inventory provision
Key audit matter
description
As at 24 April 2021, the Group held £148.3m of inventory (FY20: £158.7m). The inventory provision was
£9.1m (FY20: £9.8m), representing 6% (FY20: 6%) of the balance.
The valuation of inventory involves management judgement in recording provisions for slow moving
or obsolete inventory, and for excess inventory held as a result of reduced trading caused by global
coronavirus restrictions.
The Group accounting policy for providing for slow moving inventory is based upon the ageing of
inventory by season, with a percentage provision applied which reflects the actual historical rate of
losses made. In addition, specific provisions are made for known product ranges which management
considers unlikely to be sold at a margin through regular clearance channels.
Following the coronavirus outbreak in FY20, and continued suppressed consumer demand,
management recorded an additional £6.1m provision for excess inventory, as the level of inventory less
than 6 seasons old had increased significantly compared to budgeted levels and there was inherent
uncertainty regarding the ability to sell through inventory above cost. This excess inventory Covid
provision has reduced from £6.1m in the prior year to £2.4m at the year-end. This reflects that the
majority of inventory lines have continued to be sold through above cost in the year despite the
Group’s promotional activity due to Covid.
In addition, a £4.1m provision has been recorded in the year against AW20 concept inventory which
did not achieve the anticipated levels of sell through and of which management now plan to dispose.
The calculation of the inventory provision requires management judgement to assess the quality of
products provided for and the expected realisable value based on the quantities held and expected
sell through patterns.
Refer to note 1 for the Group’s inventory provisioning policy, note 23 ‘Inventories’ and the Audit
Committee Report.
We obtained evidence over the appropriateness of management’s assumptions applied in calculating
the value of inventory provisions.
To respond to this key audit matter we have:
• obtained an understanding of the relevant controls that the Group has established regarding the
inventory provision;
• assessed the historical accuracy of management’s provisioning percentages for aged inventory
through a retrospective review of the level of provision recorded in prior years compared to the
actual level of inventory written off to the provision held;
• compared the methodology applied in calculating the slow moving inventory obsolescence provision
to the Group’s policy and recalculated the provision, with reference to the policy;
• used data analytics to analyse the sell through rates of inventory in the year and post year-end in
order to identify any slow moving or unsold inventory lines which may require a specific provision;
136
How the scope of
our audit responded
to the key audit
matter
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
5.4 Inventory provision continued
How the scope of
our audit responded
to the key audit
matter
• assessed the reasonableness of management’s methodology for identifying ‘excess inventory’
in order to calculate the excess inventory provision for inventory less than 6 seasons old;
• assessed management’s historical forecasting accuracy of the excess current season inventory
provision by comparing the brought forward provision to the amount utilised in the year;
• determined the accuracy of the data used in the inventory provision calculation by testing the
season ageing of a sample of inventory items back to supplier invoice; and
• understood the nature and historic sell through rates for the AW20 concept inventory and
challenged management’s disposal plans in order to assess the reasonableness of the specific
provision held against this inventory.
Key observations
From the work performed above, we concluded that the level of inventory provision is appropriate.
5.5 Wholesale and other trade debtor recoverability
Key audit matter
description
At 24 April 2021, gross trade debtors of £62.2m were held by the Group (FY20: £75.8m) with a
provision for expected credit losses of £8.6m (FY20: £14.6m).
The coronavirus pandemic has led to a number of business failures and there is an expectation that
this challenging economic environment may continue for the foreseeable future especially given the
imminent end of various government support schemes. There is therefore an increased risk over
wholesale debtor recoverability.
Under IFRS 9, management is required to consider all expected credit losses based on historic,
current and forward-looking information. In addition to recording a specific provision against individual
debtor balances, where considered necessary, management performs a detailed assessment of
the creditworthiness of customers either individually or based on their country of origin, in order to
determine future lifetime expected credit losses on the entire debtor book. In the current economic
environment, there is increased management judgement regarding expected credit losses.
Refer to note 1 for the Group’s receivable provisioning policy, note 24 ‘Trade and other receivables’
and the Audit Committee Report.
To respond to this key audit matter we have:
• obtained an understanding of the relevant controls regarding management’s provisioning policy and
the assessment of expected credit losses;
• assessed management’s provision policy including mechanical accuracy, and considered expected
credit losses by country and validated country-specific risk factors to external reports in light of the
coronavirus macroeconomic impact;
• assessed subsequent cash receipts and write-offs with reference to the provision recognised
by management;
• assessed the historical accuracy of management’s debtor provisioning through a retrospective
review of the level of provision recorded in prior years compared to the actual level of write-offs
in the year; and
• discussed ongoing disputes with legal counsel.
How the scope of
our audit responded
to the key audit
matter
Key observations
From the work performed above, we concluded that wholesale debtors are recoverable and a sufficient
provision has been recognised. We have identified the need for improvements in control over the
expected credit losses provisioning model.
137
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
6. Our application of materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the
scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent Company financial statements
Materiality
£3.0m (FY20: £3.5m)
£2.9m (FY20: £3.0m)
Basis for
determining
materiality
The materiality that we used for the Group financial
statements was £3.0m which was determined with
reference to 0.5% (FY20: 0.5%) of Group revenue.
Rationale for the
benchmark
applied
In our professional judgement we believe that
revenue is the most appropriate benchmark to
determine materiality as it reflects the size and
scale of the Group and is more stable than profit
before tax. £3.0m represents approximately 8% of
Group statutory loss before tax and 3% of Group
net assets.
The basis of materiality is net assets.
Parent Company materiality equates to 1.4% of the
parent Company net assets (FY20: 1.3%), which is
capped at approximately 95% (FY20: 85%) of
Group materiality.
In determining our final materiality, based on
our professional judgement, we have considered
net assets as the appropriate measure given the
parent Company is primarily a holding company
for the Group.
Revenue £556.1m
■ Revenue
■ Group materiality
Group materiality £3.0m
Component materiality
range £0.1m to £1.7m
Audit Committee
reporting threshold £0.2m
138
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
6.2 Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Performance
materiality
Basis and
rationale for
determining
performance
materiality
Group financial statements
Parent Company financial statements
60% (FY20: 60%) of Group materiality
60% (FY20: 60%) of parent Company materiality
In determining performance materiality, we considered the following factors:
• our risk assessment, including our assessment of the Group’s overall control environment in the light
of the number of control deficiencies identified during the current and previous audits (as detailed
within the key audit matter above) and the impact of remote working due to the coronavirus
pandemic; and
• our past experience of the audit, including the value and quantum of corrected and uncorrected
misstatements in prior periods and our expectation of the likelihood of misstatements recurring
in the current period as a result of the continuing control deficiencies.
6.3 Error reporting threshold
We agreed with the Audit Committee that we would report
to the Committee all audit differences in excess of £150,000
(FY20: £175,000), as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters
that we identified when assessing the overall presentation of
the financial statements.
7. An overview of the scope of our audit
7.1 Identification and scoping of components
Our Group audit was scoped by obtaining an understanding
of the Group and its environment, including Group-wide
controls, and assessing the risks of material misstatement
at the Group level.
In response to the continued deficiencies within the control
environment (see section 5.1 above), we have increased our
audit scope compared to FY20. We focused our Group audit
scope primarily on the audit work at 9 (FY20: 9) components.
7 (FY20: 4) of these were subject to a full audit being DKH
Retail Limited, C-Retail Limited, SuperGroup Internet
Limited, Superdry plc (parent Company), Germany, Austria,
and Belgium. The remaining 2 components (FY20: 5) being
US wholesale and US retail were subject to specified audit
procedures where the extent of our testing was based on our
assessment of the risks of material misstatement and of the
materiality of the Group’s operations at those components.
In the prior year, Germany, Austria and Belgium were subject
to specified procedures rather than a full scope audit.
These components represent the principal business units
and account for 91% (FY20: 91%) of the Group’s net assets,
94% (FY20: 91%) of the Group’s revenue and 95% (FY20:
94%) of the Group’s loss before tax. They were also selected
to provide an appropriate basis for undertaking audit work to
address the risks of material misstatement identified above.
Our audit work at the components was executed at levels
of materiality applicable to each individual entity which were
lower than Group materiality and ranged from £0.1m to
£1.7m (FY20: £0.3m to £2.5m).
At the Group level we also tested the consolidation
process and carried out analytical procedures to confirm
our conclusion that there were no significant risks of material
misstatement of the aggregated financial information of the
remaining components not subject to audit or audit of
specified account balances.
All audit work for the purpose of expressing an opinion on
the Group’s financial statements is performed by the Group
audit team as the accounting records are held centrally, with
the exception of inventory counts which are performed by
local country Deloitte audit teams all of whom receive a
briefing by the Group audit team prior to attending the
count. All inventory counts were attended in person.
Revenue
Loss before tax
Net assets
Full audit scope 87%
Specified audit procedures 7%
Review at Group level 6%
Full audit scope 85%
Specified audit procedures 10%
Review at Group level 5%
Full audit scope 88%
Specified audit procedures 3%
Review at Group level 9%
139
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
7.2 Our consideration of the control environment
We identified the main finance systems, inventory systems
and in-store transaction processing systems as the key IT
systems relevant to our audit. The IT systems are primarily
managed from the centralised IT function in the UK. We
engaged our IT audit specialists to evaluate the IT systems
and determine whether they could be relied upon to support
our audit.
A number of IT control deficiencies were identified in the
2018 audit which remain unresolved, primarily relating to
third party operated controls for which a service auditor’s
report was not available and hence the operation of these
controls could not be tested. We also identified deficiencies
in access, segregation of duties and change management
controls. As a result of these findings (and the other control
deficiencies mentioned in section 5.1 above) we are unable
to adopt a controls reliance audit approach, consistent with
the 2018, 2019 and 2020 audits.
As described in the Audit Committee Report on page 101,
management has implemented a controls improvement
project which has identified a significant number of areas
for improvement. This project commenced in FY20 and
remained ongoing at the year-end. Accordingly, we extended
the scope of our substantive audit procedures in response to
the identified deficiencies. Further details are set out in the
‘impact of control deficiencies’ key audit matter in section
5.1 above.
8. Other information
The other information comprises the information included in
the Annual Report, other than the financial statements and
our auditor’s report thereon. The Directors are responsible
for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
140
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the parent
Company’s ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors
either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but
to do so.
10. Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
11. Extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is
detailed below.
11.1 Identifying and assessing potential risks related
to irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment
(in particular the deficiencies we identified in this area, see
5.1 above) and business performance including the design
of the Group’s remuneration policies, key drivers for
Directors’ remuneration, bonus levels and
performance targets;
• the Group’s own assessment of the risks that irregularities
may occur as a result of fraud or error;
• the results of our enquiries of management, internal audit
and the Audit Committee about their own identification
and assessment of the risks of irregularities;
• the Group’s compliance with rules and regulations
associated with government assistance and CJRS income
which have been taken advantage of in the current period;
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
• any matters we identified having obtained and reviewed
• inventory provisioning;
the Group’s documentation of their policies and
procedures relating to:
– identifying, evaluating and complying with laws and
regulations and whether they were aware of any
instances of non-compliance;
– detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud;
– the internal controls established to mitigate risks of
fraud or non-compliance with laws and regulations;
• the matters discussed among the audit engagement
team and involving relevant internal specialists, including
tax, valuations, IT, restructuring, modelling and forensic
specialists regarding how and where fraud might occur
in the financial statements and any potential indicators
of fraud.
As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential
for fraud in the following areas:
• store asset impairment and onerous property related
contract provisions;
• going concern;
• inventory provisioning;
• wholesale and other trade debtor provisions;
• completeness of wholesale returns provision;
• the accounting for accounts payable; and
• government assistance and accounting for the
Coronavirus Job Retention Scheme.
In common with all audits under ISAs (UK), we are also
required to perform specific procedures to respond to the
risk of management override.
We also obtained an understanding of the legal and
regulatory frameworks that the Group operates in,
focusing on provisions of those laws and regulations that
had a direct effect on the determination of material amounts
and disclosures in the financial statements. The key laws and
regulations we considered in this context included the UK
Companies Act, Listing Rules, UK corporate governance
legislation, pensions and tax legislation.
In addition, we considered whether there were provisions of
other laws and regulations that do not have a direct effect on
the financial statements but compliance with which may be
fundamental to the Group’s ability to operate or to avoid a
material penalty, such as HMRC legislation in relation to
government grants and CJRS income.
11.2 Audit response to risks identified
As a result of performing the above, we identified the
following key audit matters related to the potential risk
of fraud:
• store asset impairment and onerous property related
contract provisions;
• going concern;
141
• wholesale and other trade debtor provisions;
• the accounting for accounts payable (which is included
as part of the key audit matter in relation to the impact
of control deficiencies); and
• government assistance and accounting for the
Coronavirus Job Retention Scheme (which is included
as part of the key audit matter in relation to the impact
of control deficiencies).
The key audit matters section of our report explains the
matters in more detail and also describes the specific
procedures we performed in response to those key
audit matters.
In addition to the above, our procedures to respond to risks
identified included the following:
• reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the financial statements;
• enquiring of management, the Audit Committee and
in-house legal counsel concerning actual and potential
litigation and claims;
• performing analytical procedures to identify any unusual
or unexpected relationships that may indicate risks of
material misstatement due to fraud;
• reading minutes of meetings of those charged with
governance, reviewing internal audit reports and
reviewing correspondence with HMRC;
• involving our specialists to assist in assessing the Group’s
compliance with rules and regulations associated with
government grants and assistance (CJRS) which have
been taken advantage of in the current period;
• with regards to completeness of the wholesale
returns provision, we have tested the inputs into the
customer returns provision liability and challenged the
appropriateness of the assumptions used. This has
primarily been performed with reference to historical
return trends and post year-end returns data;
• in addressing the risk of fraud through management
override of controls, testing the appropriateness of
journal entries and other adjustments;
• assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and
• evaluating the business rationale of any significant
transactions that are unusual or outside the normal
course of business.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members, including internal specialists, and remained alert
to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Superdry plc Annual Report 2021 Our Financials → Independent Auditor’s Report
Report on other legal and
regulatory requirements
12. Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the
course of the audit:
• the information given in the Strategic Report and the
Directors’ Report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
• the Strategic Report and the Directors’ Report
have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the
Group and the parent Company and their environment
obtained in the course of the audit, we have not identified
any material misstatements in the Strategic Report or the
Directors’ Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’
statement in relation to going concern, longer-term viability
and that part of the Corporate Governance Statement
relating to the Group’s compliance with the provisions of the
UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financial statements and our knowledge obtained
during the audit:
• the Directors’ statement with regards to the
appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified,
set out on page 83;
• the Directors’ explanation as to its assessment of
the Group’s prospects, the period this assessment
covers and why the period is appropriate, set out on
pages 81 to 83;
• the Directors’ statement on fair, balanced and
understandable, set out on page 128;
• the Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks, set out
on page 88;
• the section of the Annual Report that describes the
review of effectiveness of risk management and
internal control systems, set out on page 101; and
• the section describing the work of the Audit
Committee, set out on page 100.
14. Matters on which we are required to report
by exception
14.1 Adequacy of explanations received and
accounting records
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
• we have not received all the information and explanations
we require for our audit; or
• adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent Company financial statements are not in
agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2 Directors’ remuneration
Under the Companies Act 2006 we are also required to
report if in our opinion certain disclosures of Directors’
remuneration have not been made or the part of the
Directors’ Remuneration Report to be audited is not
in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters
15.1 Auditor tenure
We were appointed by the Board of Directors on 12
September 2017 to audit the financial statements for the 52
week period ended 28 April 2018 and subsequent financial
periods. The period of total uninterrupted engagement
including previous renewals and reappointments of the firm
is four years, covering the periods ended 28 April 2018 to
24 April 2021.
15.2 Consistency of the audit report with the additional
report to the Audit Committee
Our audit opinion is consistent with the additional report
to the Audit Committee we are required to provide in
accordance with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report,
or for the opinions we have formed.
Edward Hanson (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
15 September 2021
142
Superdry plc Annual Report 2021 Our Financials → Group Statement of Comprehensive Income
Group Statement of Comprehensive Income
to the members of Superdry plc
Revenue
Cost of sales
Gross profit
Selling, general and
administrative expenses
Other gains and losses (net)
Impairment credit/(loss) on
trade receivables
Operating loss
Finance income
Finance expense
Loss before tax
Tax (expense)/credit
Loss for the period
Attributable to:
Owners of the Company
Other comprehensive expense net of tax:
Items that may be subsequently
reclassified to profit or loss
Currency translation differences
Total comprehensive expenses for
the period
Attributable to:
Owners of the Company
Earnings per share:
Basic
Diluted
Note
4
5
11
24
12
13
13
4
14
Total
2020
£m
704.4
(326.5)
377.9
(539.1)
11.0
(9.2)
(159.4)
0.2
(7.7)
(166.9)
23.5
Adjusted*
2021
£m
556.1
(263.0)
293.1
Adjusting
items
(note 6)
£m
–
–
–
Total
2021
£m
556.1
(263.0)
293.1
Adjusted*
2020
£m
704.4
(326.5)
377.9
Adjusting
items
(note 6)
£m
–
–
–
(321.6)
19.3
(19.4)
(4.7)
(341.0)
14.6
(412.1)
9.1
(127.0)
1.9
3.8
(5.4)
–
(7.2)
(12.6)
(3.3)
(15.9)
–
(24.1)
–
–
(24.1)
3.9
(20.2)
3.8
(29.5)
–
(7.2)
(36.7)
0.6
(36.1)
(9.2)
(34.3)
0.2
(7.7)
(41.8)
6.1
–
(125.1)
–
–
(125.1)
17.4
(35.7)
(107.7)
(143.4)
(15.9)
(20.2)
(36.1)
(35.7)
(107.7)
(143.4)
12.1
–
12.1
(2.5)
–
(2.5)
(3.8)
(20.2)
(24.0)
(38.2)
(107.7)
(145.9)
(3.8)
(20.2)
(24.0)
(38.2)
(107.7)
(145.9)
pence
per share
pence
per share
pence
per share
16
16
(19.4)
(19.4)
(44.0)
(44.0)
(43.5)
(43.3)
pence
per share
(174.9)
(174.1)
* Adjusted and adjusting items are defined in note 36.
2021 is for the 52 weeks ended 24 April 2021 and 2020 is for the 52 weeks ended 25 April 2020.
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the Company
statement of comprehensive income.
The notes on pages 148 to 200 inclusive are an integral part of the Group and Company financial statements.
143
Superdry plc Annual Report 2021
143
Superdry plc Annual Report 2021
Our Financials → Balance Sheets
Balance Sheets
to the members of Superdry plc Registered number: 07063562
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Investments in subsidiaries
Deferred tax assets
Derivative financial instruments
Total non-current assets
Current assets
Inventories
Trade and other receivables
Derivative financial instruments
Current tax receivables
Cash and bank balances
Total current assets
LIABILITIES
Current liabilities
Borrowings
Trade and other payables
Provisions for other liabilities and charges
Derivative financial instruments
Lease liabilities
Total current liabilities
Net current assets/(liabilities)
Non-current liabilities
Trade and other payables
Provisions for other liabilities and charges
Derivative financial instruments
Deferred liabilities
Lease liabilities
Total non-current liabilities
Net assets
EQUITY
Share capital
Share premium
Translation reserve
Merger reserve
Retained earnings
Total equity
Group
Company
24 April
2021
£m
25 April
2020
£m
24 April
2021
£m
25 April
2020
£m
Note
18
30
19
20
22
34
23
24
34
25
26
27
28
34
30
27
28
34
30
35
29.4
91.1
41.7
–
53.8
0.3
216.3
148.3
102.3
2.4
4.0
38.9
295.9
–
126.5
6.2
5.7
94.1
232.5
63.4
1.2
10.0
1.5
1.1
175.5
189.3
90.4
41.7
118.0
48.4
–
53.3
0.1
261.5
158.7
91.6
2.5
6.8
307.4
567.0
270.7
103.3
4.2
2.1
80.1
460.4
106.6
2.2
10.8
0.2
1.4
240.8
255.4
112.7
5.5
1.8
9.9
260.4
4.7
–
282.3
1.5
210.3
–
0.4
0.9
213.1
–
274.5
0.3
–
2.1
276.9
5.2
5.5
16.3
257.5
2.0
–
286.5
2.3
257.9
–
4.2
3.2
267.6
60.1
260.2
0.1
–
1.8
322.2
(63.8)
(54.6)
–
0.3
–
–
3.6
3.9
–
0.2
–
–
6.3
6.5
214.6
225.4
4.1
149.2
6.6
(302.5)
233.0
90.4
4.1
149.1
(5.5)
(302.5)
267.5
112.7
4.1
149.2
–
–
61.3
214.6
4.1
149.1
–
–
72.2
225.4
The Company loss for the year is £12.6m (2020: £148.0m loss). The notes on pages 148 to 200 inclusive are an integral part of
the Group and Company financial statements. The financial statements on pages 143 to 200 were approved by the Board of
Directors and authorised for issue on 15 September 2021 and signed on its behalf by:
Julian Dunkerton
Chief Executive Officer
Shaun Wills
Chief Financial Officer
144
Superdry plc Annual Report 2021
144
Superdry plc Annual Report 2021
Our Financials → Cash Flow Statements
Cash Flow Statements
to the members of Superdry plc
Cash generated from operating activities
Tax receipt/(payment)
Net cash generated from operating activities
Cash flow from investing activities
Investments in subsidiaries
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from disposal of assets held for sale
Net cash used in investing activities
Cash flow from financing activities
Dividend payments
Proceeds of issue of share capital
Draw down of Revolving Credit Facility
Repayment of Revolving Credit Facility
Net interest paid
Repayment of leases – principal amount
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Net cash and cash equivalents/(debt) at beginning of period
Exchange gains/(losses) on cash and cash equivalents
Net cash and cash equivalents/(debt) at end of period
Note
32
20
17
30
33
33
Group
Company
2021
£m
50.1
2.5
52.6
–
(6.8)
(6.8)
–
(13.6)
–
0.1
–
–
(7.2)
(39.9)
(47.0)
(8.0)
36.7
10.2
38.9
2020
£m
87.5
(2.2)
85.3
–
(6.4)
(7.5)
2.4
(11.5)
(3.4)
–
(30.0)
30.0
(7.5)
(61.1)
(72.0)
1.8
35.9
(1.0)
36.7
2021
£m
71.4
3.0
74.4
(3.1)
(2.5)
(2.3)
–
(7.9)
–
0.1
–
–
(8.8)
(0.6)
(9.3)
57.2
(56.9)
0.6
0.9
2020
£m
(30.7)
(4.2)
(34.9)
(3.6)
(1.5)
(4.7)
2.4
(7.4)
(3.4)
–
(30.0)
30.0
(9.8)
(1.8)
(15.0)
(57.3)
0.5
(0.1)
(56.9)
2021 is for the 52 weeks ended 24 April 2021 and 2020 is for the 52 weeks ended 25 April 2020.
The notes on pages 148 to 200 inclusive are an integral part of the Group and Company financial statements.
145
Superdry plc Annual Report 2021
145
Superdry plc Annual Report 2021
Our Financials → Statements of Changes in Equity
Statements of Changes in Equity
to the members of Superdry plc
Group
Note
Balance at 27 April 2019
Comprehensive expense
Loss for the period
Other comprehensive expense
Currency translation differences
Total other comprehensive expense
Total comprehensive expense for
the period
Transactions with owners
Employee share award schemes
Dividend payments
Total transactions with owners
Balance at 25 April 2020
Comprehensive expense
Loss for the period
Other comprehensive income
Currency translation differences
Total other comprehensive income
Total comprehensive
(expense)/income for the period
Transactions with owners
Shares issued
Employee share award schemes
Dividend payments
Total transactions with owners
Balance at 24 April 2021
8,9
17
8,9
17
Share
capital
£m
4.1
Share
premium
£m
149.1
Translation
reserve
£m
Merger
reserve
£m
Retained
earnings
£m
Total
equity
£m
(3.0)
(302.5)
413.1
260.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2.5)
(2.5)
(2.5)
–
–
–
–
–
–
–
–
–
–
(143.4)
(143.4)
–
–
(2.5)
(2.5)
(143.4)
(145.9)
1.2
(3.4)
(2.2)
1.2
(3.4)
(2.2)
4.1
149.1
(5.5)
(302.5)
267.5
112.7
–
–
–
–
–
–
–
–
–
–
–
–
0.1
–
–
0.1
–
12.1
12.1
12.1
–
–
–
–
–
–
–
–
–
–
–
–
(36.1)
(36.1)
–
–
12.1
12.1
(36.1)
(24.0)
–
1.6
–
1.6
0.1
1.6
–
1.7
4.1
149.2
6.6
(302.5)
233.0
90.4
146
Superdry plc Annual Report 2021
146
Superdry plc Annual Report 2021
Our Financials → Statements of Changes in Equity
Company
Balance at 27 April 2019
Comprehensive expense
Loss for the period
Total comprehensive expense for the period
Transactions with owners
Employee share award schemes
Dividends paid
Total transactions with owners
Balance at 25 April 2020
Comprehensive expense
Loss for the period
Other comprehensive income
Currency translation differences
Total other comprehensive income
Total comprehensive (expense)/income for the period
Transactions with owners
Employee share award schemes
Shares issued
Dividends paid
Total transactions with owners
Balance at 24 April 2021
Note
15
8,9
17
15
8,9
17
Share
capital
£m
4.1
Share
premium
£m
149.1
Retained
earnings
£m
222.4
Total
equity
£m
375.6
–
–
–
–
–
–
–
–
–
–
4.1
149.1
–
–
–
–
–
–
–
–
–
–
–
–
–
0.1
–
0.1
(148.0)
(148.0)
(148.0)
(148.0)
1.2
(3.4)
(2.2)
72.2
1.2
(3.4)
(2.2)
225.4
(12.6)
(12.6)
0.1
0.1
0.1
0.1
(12.5)
(12.5)
1.6
–
–
1.6
1.6
0.1
–
1.7
4.1
149.2
61.3
214.6
The notes on pages 148 to 200 inclusive are an integral part of the Group and Company financial statements.
147
Superdry plc Annual Report 2021
147
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
Notes to the Group and Company Financial Statements to the
members of Superdry plc
1. Principal accounting policies
c) Basis of consolidation
General information
The Company is a public company limited by shares
incorporated in the United Kingdom under the Companies
Act and is registered in England and Wales. The address of
the Company’s office is shown on page 200. The current
period (2021) is for the 52 weeks ended 24 April 2021
(2020: 52 weeks ended 25 April 2020 (2020)).
a) Basis of preparation
The financial statements of Superdry plc (the Company)
and Superdry plc and its subsidiary undertakings in the UK,
the Republic of Ireland, Belgium, France, India, Hong Kong,
Germany, the Netherlands, Spain, Turkey, Scandinavia and
the United States of America as detailed in note 20 (the
Group) have been prepared on a going concern basis under
the historical cost convention as modified by fair values, in
accordance with International Financial Reporting Standards
(IFRS) adopted for use in the European Union and therefore
the Group financial statements comply with Article 4 of the
EU IAS Regulation. Also, they have been prepared in
accordance with the Companies Act 2006 applicable to
companies reporting under IFRS.
The preparation of financial statements in conformity with
IFRS requires the use of certain accounting estimates and
requires management to exercise its judgement (note 2) in
the process of applying the Group’s accounting policies.
These policies have been consistently applied to all periods
presented unless otherwise stated. The Group financial
statements are presented in Sterling and all values are
rounded to the nearest hundred thousand, except
where indicated.
b) Going concern
As detailed on page 81 management has considered the
forecasts, sensitivities and mitigating actions available
and having regard to the risks and uncertainties to which
the Group is exposed, the Directors have a reasonable
expectation that the Company and the Group have adequate
resources to continue in operational existence for the
foreseeable future, and operate within its borrowing facilities
and covenants for a period of at least 12 months from the
date of signing the financial statements. Accordingly, the
financial statements continue to be prepared on the going
concern basis.
Consolidated subsidiaries are those entities over which the
Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from
its involvement with the entity and could affect those returns
through its power over the entity.
The results of any subsidiaries acquired during the period
are included in the Group statement of comprehensive
income from the date on which control is transferred to
the Group. Accounting policies of subsidiaries are changed
when necessary to ensure consistency with the accounting
policies adopted by the Group.
Under IFRS 11 ‘Joint Arrangements’, investments in joint
arrangements are classified as either joint operations or
joint ventures. The classification depends on the contractual
rights and obligations of each investor, rather than the legal
structure of the joint arrangement.
The Group determines, at each reporting date, whether
there is any objective evidence that the investment in joint
ventures is impaired. If this is the case, the Group calculates
the amount of impairment as the difference between the
recoverable amount of the joint ventures and the carrying
value and recognises the amount adjacent to “share of
profit or loss of joint venture” in the Group statement of
comprehensive income. Intercompany transactions and
balances are eliminated on consolidation.
d) Foreign currencies
The consolidated financial information is presented in
Sterling, which is the Company’s functional and the Group’s
presentation currency. Transactions in foreign currencies
are recorded at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated at the rates ruling at the balance
sheet date. Resulting exchange gains and losses are
recognised in the Group statement of comprehensive
income. Upon consolidation, the assets and liabilities of
the Group’s foreign operations are translated at the rate
of exchange ruling at the balance sheet date. Income and
expense items of foreign operations are translated at the
actual rate or average rate if not materially different.
Differences on translation are recognised in other
comprehensive income and held within the
translation reserve.
148
Superdry plc Annual Report 2021
148
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
1. Principal accounting policies continued
e) Revenue recognition
Revenue is measured at the fair value of the consideration
received, or receivable, and represents amounts receivable
for goods supplied, stated net of discounts, returns and
value added taxes.
Own store revenue – stores segment
Own store revenue from the provision of sale of goods is
recognised at the point of sale of a product to the customer.
Own store sales are settled in cash or by credit or payment
card. It is the Group’s policy to sell its products to the
customer with a right to exchange or full refund within
28 days subject to discretionary extension. Provisions
are made for own store returns based on the expected
level of returns, which in turn is based upon the historical
rate of returns. At the point of sale, a returns liability
and corresponding adjustment to revenue is recognised
for those products that the Group has a right to recover.
The anticipated returns are recognised as an inventory
asset, with a corresponding adjustment to cost of sales.
Concession revenue – stores segment
Concession revenues from the provision of sale of goods
are recognised gross at the point of sale of a product to
the customer; this is on the basis that the vendor acts
as principal. Concession revenues are settled in cash, by
the concession grantors net of commissions or other fees
payable. It is the concessions’ policy to sell its products with
a right to exchange within 28 days and a cash refund within
14 days. Provisions are made for concession returns based
on the expected level of returns, which in turn is based upon
the historical rate of returns. At the point of sale, a returns
liability and corresponding adjustment to revenue is
recognised for those products that the Group has a right
to recover. The anticipated returns are recognised as an
inventory asset, with a corresponding adjustment to cost
of sales.
Ecommerce revenue
Revenue from the provision of the sale of goods on
the internet is recognised at the point that control of
the inventory has passed to the customer, which is when
the goods are received by the customer. Transactions are
settled by credit card, payment card or other electronic
payment providers. Customers have a right to exchange or
full refund within a range of 21 to 100 days, depending on the
website the purchase is made from. Provisions are made for
E-commerce credit notes based on the expected level of
returns, which in turn is based upon the historical rate
of returns. At the point of sale, a returns liability and
corresponding adjustment to revenue is recognised for
those products that the Group has a right to recover. The
anticipated returns are recognised as an inventory asset,
with a corresponding adjustment to cost of sales.
Wholesale revenue
Wholesale revenues from the sale of goods are recognised
at the point that control of the inventory has passed to
the customer, which depends on the specific terms and
conditions of sales transactions, and which is typically upon
delivery. Revenues are settled in cash, net of discounts.
Provisions are made for Wholesale credit notes based on
the expected level of returns, which in turn are based upon
the historical rate of returns. At the point of sale, a returns
liability and corresponding adjustment to revenue are
recognised for those products that the Group has a right
to recover. The anticipated returns are recognised as an
inventory asset, with a corresponding adjustment to cost
of sales.
f) Other income
Royalty income
The Group receives royalty income from its franchise
partners based on specific agreements in place. The income
is recognised based on the specific performance obligations
within the agreements. This income is recognised within
other income as it does not relate to consideration for
goods supplied to customers.
g) Finance income
Finance income comprises interest receivable on funds
invested and cash deposits. Finance income is recognised
in the Group statement of comprehensive income using
the effective interest method.
h) Finance expenses
Finance expenses comprise interest payable on interest-
bearing loans, lease liabilities, short-term borrowings and
lending facilities. Finance expenses are recognised in the
Group statement of comprehensive income using the
effective interest method.
i) Leasing and similar commitments
IFRS 16 became effective for periods starting on or after
1 January 2019 and replaced the standard IAS 17 Leases
and related interpretations. IFRS 16 requires entities to apply
a single lease accounting model, with lessees recognising
right-of-use assets and lease liabilities on the balance sheet
for all applicable leases except for certain short-term and
low-value leases.
The right-of-use assets comprise the initial measurement
of the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incentives
received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and
impairment losses. Right-of-use assets are depreciated
over the shorter period of lease term and useful life of
the right-of-use asset. The depreciation starts at the
commencement date of the lease.
149
Superdry plc Annual Report 2021
149
Superdry plc Annual Report 2021 Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
1. Principal accounting policies continued
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease.
If this rate cannot be readily determined, the Group
uses its incremental borrowing rate. Lease liabilities
are subsequently measured at amortised cost, increased
for interest charges and reduced for lease payments.
The Group assesses whether a contract is or contains a
lease at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with
respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease
term of 12 months or less), leases of low-value assets (such
as personal computers, small items of office furniture and
telephones) and variable lease agreements. For these
leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term
of the lease unless another systematic basis is more
representative of the time pattern in which economic
benefits from the leased assets are consumed.
Lease modifications
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use
asset) whenever:
• The lease term has changed or there is a significant
event in which case the lease liability is remeasured by
discounting the revised lease payments using a revised
discount rate.
• The lease payments change due to changes in an index,
in which case the lease liability is remeasured by
discounting the revised lease payments using an
unchanged discount rate.
• A lease contract is modified, and the lease modification is
not accounted for as a separate lease, in which case the
lease liability is remeasured based on the lease term of the
modified lease by discounting the revised lease payments
using a revised discount rate at the effective date of the
modification. Differences arising between the right-of-use
asset and the lease liability as part of the modification
calculation are recognised in the statement of
comprehensive income under other gains and losses.
Lease premiums
Lease premiums are only recognised on leases that do not
fall under the scope of IFRS 16. Lease premiums paid to
tenants are initially recognised as an intangible asset in
the balance sheet at the point the recognition criteria in
the lease are met, and debited to selling, general and
administrative expenses in the Group statement of
comprehensive income on a straight-line basis over the
term of the lease commencing from the opening date.
j) Property, plant and equipment
Property, plant and equipment is stated at historical
cost less accumulated depreciation and impairment.
Cost includes the original purchase price and the costs
attributable to bringing the asset into its working condition.
Gains and losses on disposals are determined by comparing
the proceeds received with the carrying amount and are
recognised in the Group statement of comprehensive income.
Depreciation is provided at rates calculated to write down
the cost of the assets, less their estimated residual values,
over their remaining useful economic lives as follows:
Freehold buildings
– 50 years on a straight-line basis
Leasehold
improvements
Furniture, fixtures
and fittings
– 5 – 10 years on a straight-line basis
– 5 – 10 years on a straight-line basis
Computer equipment – 3 – 5 years on a straight-line basis
Land is not depreciated. Residual values and useful
economic lives are reviewed annually and adjusted
if appropriate.
Property, plant and equipment is reclassified as held for sale
assets if their carrying amount will be recovered through a
highly probable sale transaction rather than through
continuing use.
k) Impairment of non-financial assets
The carrying values of non-financial assets are tested
annually to determine whether there is any indication of
impairment. If any such indication exists, the recoverable
amount of the asset is estimated. Where the asset does
not generate cash flows which are independent from other
assets, the recoverable amount of the cash generating unit
(CGU) to which the asset belongs is estimated.
The recoverable amount of a non-financial asset is the
higher of its fair value less costs to sell, and its value in use.
Value in use is the present value of the future cash flows
expected to be derived from an asset or CGU. An impairment
loss is recognised in the Group statement of comprehensive
income whenever the carrying amount of an asset or CGU
exceeds its recoverable amount. Impairment reversals
are recognised in the Group statement of comprehensive
income. An impairment loss in a subsidiary consolidated
under predecessor accounting (note 1ad) is recognised as
a movement in the merger reserve and retained earnings
in addition to recognising a loss on the Group statement
of comprehensive income. Further information on how
impairments have been calculated can be found in note 2.
150
Superdry plc Annual Report 2021
150
Superdry plc Annual Report 2021 Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
1. Principal accounting policies continued
l) Intangible assets
Intangible assets acquired separately from a business are
recognised initially at cost. An intangible asset acquired
as part of a business combination is recognised outside
goodwill if the asset is separable or arises from contractual
or other legal rights and its fair value can be measured
reliably. Following initial recognition, intangible assets
are carried at cost less accumulated amortisation and
impairment losses. Intangible assets with a finite life have
no residual value and are amortised on a straight-line basis
over their expected useful lives as follows:
Trademarks
– 10 years
Website and software
– 5 years
Lease premiums
– Over the life of the lease
on a straight-line basis
Distribution agreements
– 6 – 23 years
Trademarks comprise the external cost of registration and
associated legal costs. Website and software costs consist
of externally incurred development costs, as well as internal
payroll-related costs directly associated with the project.
Lease premiums comprise the amount paid to the previous
tenant to acquire the lease.
Distribution agreements comprise the fair value, at the date
of acquisition, of distribution agreements acquired as part of
a business combination.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s
previously held equity interest in the acquiree (if any) over
the net of the acquisition-date amounts of the identifiable
assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts
of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the
amount of any non-controlling interests in the acquiree and
the fair value of the acquirer’s previously held interest in
the acquiree (if any), the excess is recognised immediately
in profit or loss as a bargain purchase gain. Goodwill on
acquisitions of subsidiaries is included in intangible assets.
Goodwill is not amortised but is tested annually for
impairment and carried at cost less accumulated impairment
losses. Impairment losses on goodwill are not reversed.
m) Investments
Investments in subsidiaries are recorded at historical cost,
less any provision for impairment.
The Group applies IFRS 11 to all joint arrangements. Under
IFRS 11, investments in joint arrangements are classified as
either joint operations or joint ventures depending on the
contractual rights and obligations of each investor. The
Group has assessed the nature of its joint arrangements
and determined them to be joint ventures. Interests in joint
ventures are accounted for using the equity method of
accounting after initially being recognised at cost in the
consolidated balance sheet.
When the Group’s share of losses exceeds the Group’s
interest in the joint venture, the Group discontinues
recognising its share of further losses. Additional losses
are recognised only to the extent that the Group has
incurred legal or constructive obligations on behalf of
the joint venture.
n) Financial instruments
Derivative financial instruments and hedging activities
Derivative financial instruments are recognised initially at
their fair value and remeasured at fair value at each period
end. Derivative financial instruments are categorised as held
at fair value through the profit and loss account. The gain
or loss on remeasurement to fair value is recognised
immediately in the Group statement of comprehensive
income. The Group has not applied hedge accounting.
Foreign forward exchange derivative gains and losses
are recognised in other gains and losses (net).
Financial assets
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all
the risks and rewards of ownership of the asset to another
entity. On derecognition of a financial asset measured at
amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and
receivable is recognised in profit or loss. In addition, on
derecognition of an investment in a debt instrument
classified as at FVTOCI, the cumulative gain or loss
previously accumulated in the investments revaluation
reserve is reclassified to profit or loss.
o) Inventories
Inventories are valued at the lower of cost or net realisable
value. Cost comprises costs associated with the purchase
and bringing of inventories to the distribution centres and
is based on the weighted average principle. Provisions are
made for obsolescence, mark-downs and shrinkage. The
cost formula used for measuring inventory is moving
average cost.
Sample stock is expensed through the Group statement of
comprehensive income when incurred.
p) Trade receivables
Trade receivables are initially recognised at transaction price
and subsequently measured at amortised cost, less a loss
allowance. The loss allowance is measured at an amount
equal to lifetime expected credit losses through the
simplified model using a provision matrix.
q) Assets classified as held for sale
Non-current assets are classified as held for sale when their
carrying amount will be recovered through a sale transaction
rather than through continuing use. This condition is met
only when the sale is highly probable, the asset is available
for immediate sale, and when it is expected to complete
within one year. These assets are stated at the lower of
carrying amount and fair value less costs to sell.
151
Superdry plc Annual Report 2021
151
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
1. Principal accounting policies continued
v) Share-based payments – Founder Share Plan
r) Cash and bank balances
Cash and bank balances comprise cash at bank and in hand
and short-term deposits with an original maturity date of
three months or less. Bank overdrafts are offset against cash
when a legal right of offset exists and where the Group can
demonstrate the intention to net settle. For the purpose of
the cash flow statement, cash and cash equivalents consist
of cash and short-term deposits, less overdrafts, which are
repayable on demand.
s) Provisions
A provision is recognised in the balance sheet when the
Group has a present legal or constructive obligation as
a result of a past event, it is more likely than not that an
outflow of economic benefits will be required to settle the
obligation, and the obligation can be estimated reliably.
Provisions are discounted using the risk-free rate if the
impact on the provision is deemed to be material.
Provisions for onerous property related contracts are
recognised when the Group believes that the unavoidable
costs of meeting or exiting the lease obligations exceed the
economic benefits expected to be received under the lease.
The founders of Superdry, Julian Dunkerton and James
Holder, operate a share-based compensation plan that
awards both cash and shares; for the purposes of IFRS 2
it is considered to be an equity-settled share-based
compensation plan. The Founder Share Plan (FSP) (see
note 9 for further details) falls within the scope of IFRS 2
despite the Group neither purchasing nor issuing the shares,
nor the cost of the cash being a Company expense. Fair
value is determined using the Monte Carlo pricing model.
The amount to be expensed over the vesting period is
determined by reference to the fair value of share incentives,
adjusted at the grant of each of share incentive for dilution
assumptions. These dilution assumptions are not revised
after the grant of the share incentive. Non-market vesting
conditions are considered as part of the assumptions about
the number of share incentives that are expected to vest.
The impact of the revision on original estimates, if any,
is recognised in the Group statement of comprehensive
income, with a corresponding adjustment to equity over the
remaining vesting period. The measurement period for the
market-based vesting criteria expired over the course of the
current year; an amount for the scheme is expensed in the
current year to reflect the original exercise period.
t) Employee benefit obligations
w) Long-term loans (receivable)
Wages, salaries, payroll tax, paid annual leave, sick leave,
bonuses, and non-monetary benefits are accrued in the year
in which the associated services are rendered by employees
of the Group.
The Group operates a defined contribution pension
scheme for the benefit of its employees. The Group pays
contributions into an independently administered fund via
a salary sacrifice arrangement. The costs to the Group
of providing these benefits are recognised in the Group
statement of comprehensive income and comprise the
number of contributions payable to the scheme in the year.
u) Share-based payments – Group operated schemes
The Group operates several equity settled share-based
compensation plans. The fair value of the shares under such
plans is recognised as an expense in the Group statement
of comprehensive income. Where relevant, fair value is
determined using the Black–Scholes option pricing model.
The amount to be expensed over the vesting period is
determined by reference to the fair value of share incentives
excluding the impact of any non-market vesting conditions.
Non-market vesting conditions are considered as part of the
assumptions about the number of share incentives that are
expected to vest. At each balance sheet date, the Group
revises its estimate of the number of share incentives that
are expected to vest. The impact of the revision on original
estimates, if any, is recognised in the Group statement of
comprehensive income, with a corresponding adjustment
to equity over the remaining vesting period. The Group also
operates cash-settled awards. The fair value of the liability
for these is revised at each balance sheet date and the
cost is recognised in the income statement over the
vesting period.
Long-term loans are recognised on an amortised cost basis
less any loss allowance for expected credit losses. The loan
meets the solely principal and interest on the principal (SPPI)
test and it is held in order to collect all contractual cash
flows. The loss allowance is measured at an amount equal
to 12-month expected credit losses unless there was a
significant increase in credit risk since inception. In such
cases, the loss allowance is measured at the amount equal
to lifetime expected credit losses. The movement in the
provision is recognised in the Group statement of
comprehensive income.
x) Trade and other payables
Trade and other payables, excluding lease incentives, are
non-interest bearing and are initially recognised at their
fair value and subsequently measured at amortised cost.
Generally, this results in their recognition at their
nominal value.
Contract liabilities
Contract liabilities are recognised by the Group where
payment has been received and there is a future obligation
to transfer goods or services, but the threshold for revenue
recognition has not yet been met. These primarily relate
to the provision of gift cards and the timing of the sale
of goods.
152
Superdry plc Annual Report 2021
152
Superdry plc Annual Report 2021 Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
1. Principal accounting policies continued
ab) Share premium
y) Taxation
The policy for current and deferred tax, when relevant, is
as follows:
The share premium account represents the excess of the
issue price over the nominal value on ordinary shares issued,
less incremental costs directly attributable to issue the
new shares.
• tax on the profit or loss for the period will comprise current
and deferred tax;
ac) Retained earnings
• current tax expense is calculated using the tax rates
which have been enacted or substantively enacted at the
balance sheet date, and any adjustment to tax payable in
respect of previous years;
• deferred tax is provided using the balance sheet liability
method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for
taxation purposes;
• the amount of deferred tax provided is based on
the expected realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted
or substantively enacted by the balance sheet date;
• a deferred tax asset is recognised only to the extent that
it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax
assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realised
(see note 22); and
• deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred tax
assets and liabilities relate to taxes levied by the same
taxation authority on either the same taxable entity or
different taxable entities where there is an intention to
settle the balances on a net basis.
Uncertain tax positions
A provision is recognised for those matters for which the tax
determination is uncertain but it is considered probable that
there will be a future outflow of funds to a tax authority. The
provisions are measured at the best estimate of the amount
expected to become payable. The assessment is based on
the judgement of tax professionals within the Company
supported by previous experience in respect of such
activities and in certain cases based on specialist
independent tax advice.
z) Dividends
Dividends are recognised as a liability and deducted from
equity at the balance sheet date only if they have been
approved before or on the balance sheet date and not paid.
Interim dividends are recognised in the period they are paid.
aa) Share capital
Ordinary shares are classified as equity. The share capital
represents the nominal value of shares that have been issued.
The retained earnings reflect the accumulated profits and
losses of the Group.
ad) Merger reserve and other reserves
The consolidation of the subsidiaries acquired in advance
of the Initial Public Offering in March 2010 (C-Retail Limited,
DKH Retail Limited, SuperGroup Concessions Limited,
SuperGroup International Limited, SuperGroup Internet
Limited and SuperGroup Retail Ireland Limited) into the
financial statements of Superdry plc has been prepared
under the principles of predecessor accounting, whereby an
acquirer is not required to be identified, and all entities are
included at their pre-combination carrying amounts. This
accounting treatment leads to differences on consolidation
between consideration and fair value of the associated net
assets and this difference is included within equity as a
merger reserve. The translation reserve relates to gains
and losses arising on retranslating the net assets of
overseas subsidiaries into sterling.
ae) Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating
Decision-Maker (CODM). The CODM, which is responsible
for allocating resources and assessing performance of
the operating segments, has been identified as the
Executive Committee.
At each reporting date the Group reviews the composition
of its segments to reflect the impact of changes in reporting
provided to the CODM or restructures in the business.
Where changes in the operating segments are identified, the
comparative information is restated where possible. There
has been a change in the operating segments during the
reporting period – see note 4 for further information.
af) Cost of sales
Cost of sales comprises movements between opening and
closing inventories, purchases, carriage in, commissions
payable, and other related expenses. As explained in note 1e,
customers have a right of return. When customers exercise
this right, the Group has a right to recover the product and
as such recognises a right to returned goods asset and a
corresponding adjustment to cost of sales. This is based
on the historical rate of return.
153
Superdry plc Annual Report 2021
153
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
1. Principal accounting policies continued
ai) Impairment of financial assets
The Group recognises a loss allowance for expected credit
losses (ECL) on investments in debt instruments that are
measured at amortised cost or at fair value through other
comprehensive income (FVTOCI), trade receivables
and lease receivables, as well as on financial guaranteed
contracts. The amount of ECL is updated at each reporting
date to reflect changes in credit risk since initial recognition
of the respective financial instrument.
The Group always recognises lifetime ECL for trade
receivables and lease receivables. The ECL on these
financial assets are estimated using a provision matrix based
on the Group’s historical credit loss experience, adjusted for
factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well
as the forecast direction of conditions at the reporting date.
For all other financial instruments, the Group recognises
lifetime ECL when there has been a significant increase in
credit risk since initial recognition. A significant increase in
credit risk is defined in note 34. However, if the credit risk on
the financial instrument has not increased significantly since
initial recognition, the Group measures the loss allowance
for that financial instrument at an amount equal to 12-month
ECL. Lifetime ECL represents the expected losses that will
result from all possible default events over the expected
life of a financial instrument. In contrast, 12-month ECL
represents the portion of lifetime ECL that is expected to
result from default events on a financial instrument that
are possible within 12 months after the reporting date.
ag) Government grants
Government grants are not recognised until there is
reasonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be
received. Government grants are recognised in the Group
statement of comprehensive income on a systematic basis
over the periods in which the Group recognises an expense
for the related costs for which the grants are intended to
compensate. The income is directly offset against the
expense for the related costs for which the grants are
intended to compensate.
ah) Adjusting items
Adjusting items are disclosed separately in the Group
statement of comprehensive income and are applied to the
reported profit or loss before tax to arrive at the adjusted
result. This presentation is consistent with the way that
financial performance is measured by management and
reported internally. In determining whether events or
transactions are treated as adjusting items, management
considers quantitative as well as qualitative factors such
as the frequency or predictability of occurrence.
Examples of charges or credits meeting the above definition,
and which have been presented as adjusting items in the
current and/or prior years, include:
• acquisitions/disposals of significant businesses
and investments;
• impact on deferred tax assets/liabilities for changes in
tax rates;
• business restructuring programmes;
• derecognition of deferred tax assets;
• asset impairment and onerous property related
contracts charges;
• the movement in the fair value of unrealised financial
derivatives; and
• IFRS 2 charges in respect of FSP.
If other items meet the criteria, which are applied consistently
from year to year, they are also treated as adjusting items.
Further information about the determination of adjusting
items in financial year 2021 is included in notes 6 and 36.
In previous reporting periods the term ‘exceptional and other
items’ had been used. This has been changed to ‘adjusting
items’ from the current period.
154
Superdry plc Annual Report 2021
154
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
Cash flows beyond this five-year period as set out in the
medium-term financial plan are extrapolated using long-term
growth rates that are indicative of country-specific rates.
The cash flows are discounted using the appropriate
discount rate. The cash flows are modelled for each store
through to their lease expiry date. Lease extensions have
only been assumed in the modelling where they have been
agreed with landlords.
Central costs are attributed to store CGUs where they
can be allocated on a reasonable and consistent basis,
and assumptions are required to determine the basis for
allocation. In addition to directly attributable store costs,
other relevant operating costs have been attributed to store
CGUs on a reasonable and consistent basis where possible,
which include certain distribution, IT, HR and marketing
expenses, totalling 10-14% of the overall annual cost base.
Management estimates discount rates using pre-tax rates
that reflect the current market assessment of the time value
of money and the risks specific to the CGUs. The pre-tax
discount rates range from 12.6% to 15.1% (2020: 12.2% to
14.7%) and are derived from the Group’s post-tax WACC
range of 10.0% to 11.6% (2020: 9.2% to 11.9%). Discount
rates are not considered a sensitive assumption – a 500bps
change in the discount rates, which is not considered to be
reasonably possible, would result in a £5.7m increase or
£4.2m decrease in the net impairment.
Further significant costs (or credits) may be recorded
in future years dependent on the longer-term impact of
Covid-19 and the success of the brand reset.
During the year, the Group has recognised a net impairment
charge of £3.3m relating to property, plant and equipment
and a net impairment charge of £7.4m relating to right-of-use
assets. These impairment charges have been recognised
as part of adjusting items within selling, general and
administrative expenses. The carrying value of property,
plant and equipment (note 18), right-of-use assets (note 30)
and intangible assets (note 19) after the impairment
assessment is £162.2m.
2. Critical accounting judgements and key
sources of estimation uncertainty in applying
accounting policies
The preparation of the financial statements requires
judgements, estimates and assumptions to be made that
affect the reported value of assets, liabilities, revenues and
expenses. The nature of estimation and judgement means
that actual outcomes could differ from expectation.
Key sources of estimation uncertainty
Management consider that accounting estimates and
assumptions made in relation to the following items have a
significant risk of resulting in a material adjustment to the
carrying amounts of assets and liabilities within the next
financial period.
Store impairment estimates
Store assets (as with other financial and non-financial
assets) are subject to impairment based on whether current
or future events and circumstances suggest that their
recoverable amount may be less than their carrying value.
Recoverable amount is based on the higher of the value in
use and fair value less costs to dispose, although as all the
Group’s owned stores are leasehold, only value in use has
been considered in the impairment assessment. Value in use
is calculated from expected future cash flows using suitable
discount rates and including management assumptions
and estimates of future performance. Store asset carrying
values are inclusive of any right-of-use assets following the
transition to IFRS 16. An impairment charge of £22.8m (2020:
£136.8m) and an impairment reversal of £12.1m (2020: £nil)
were recognised in the period (net impairment of £10.7m,
2020: £136.8m).
For impairment testing purposes, the Group has determined
that each store is a CGU. Each CGU is tested for impairment
if any indicators of impairment have been identified. Given
the decline in store sales in the year, all 231 owned stores
have been tested for impairment in the current year.
The key estimates for the value in use calculations are those
regarding expected changes in future cash flows and the
allocation of central costs. The key assumptions used in
determining store cash flows are the growth in both sales
and gross margin set out in the medium-term plan.
The value in use of each CGU is calculated based on the
Group’s latest budget and forecast cash flows, covering a
five-year period (the medium-term financial plan), which
has regard for historic performance, knowledge of the
current market and the impact of the Covid-19 pandemic,
together with the Group’s views on the achievable growth,
all of which have been reviewed and approved by the Board.
The medium-term financial plan is prepared on a ‘top down’
basis and has been attributed to individual stores based on
their historic performance relative to the rest of the store
estate, as well as the store’s sensitivity to the impact of
the Covid-19 pandemic. Disruption caused by Covid-19
is estimated to continue throughout FY22 with a gradual
recovery of footfall. The subsequent assumptions regarding
future store sales recovery, as outlined in the going concern
statement, are considered key estimates.
155
Superdry plc Annual Report 2021
155
Superdry plc Annual Report 2021 Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
Based on the factors set out above, the Group has
reassessed the onerous property related contract provision
as being £12.1m (2020: £12.4m). This value is after a net
£5.1m additional provision, charged to the Group statement
of comprehensive income (2020: net £12.0m provision
release). This net additional provision consists of a gross
provision charge of £8.3m and a gross provision release
of £3.2m when calculated on an individual contract basis.
The onerous property related contracts provision charge
has been recognised within adjusting items within selling,
general and administrative expenses. Further significant
costs (or credits) may be recorded in future years dependent
on the longer-term impact of Covid-19 and the success of
the brand reset.
Risk-free rates are not considered a sensitive assumption – a
20% change in the risk-free rates, which is not considered to
be reasonably possible, would result in a £8.5m increase or
£3.5m decrease in the net impairment.
The Group has performed sensitivity analysis on the
onerous property related contract provisions using possible
scenarios based on recent market movements, consistent
with those sensitivities disclosed above in the ‘store
impairment’ section:
• An increase of 1,000bps in the margin rate in all years
for each territory would decrease the onerous property
related contracts charge by £3.5m
• A decrease of 1,000bps in the margin rate in all years for
each territory would increase the onerous property related
contracts charge by £10.2m
• An increase of 40% in year 1 sales growth for each
territory would decrease the onerous property related
contracts charge by £3.7m
• A decrease of 40% in year 1 sales growth for each territory
would increase the onerous property related contracts
charge by £8.3m
The downside scenario modelled in the viability assessment
(see page 83 for further details), would increase the onerous
property related contracts charge by £16.1m.
2. Critical accounting judgements and key
sources of estimation uncertainty in applying
accounting policies continued
The Group has carried out a sensitivity analysis on the
impairment tests for its owned store portfolio on an
aggregated basis for property, plant and equipment, right-
of-use assets and intangibles, using various reasonably
possible scenarios based on recent market movements
including discount rates and a change to the sales and
margin assumptions in the medium-term financial plan:
• An increase of 200bps in the gross margin rate in all
years for each territory would decrease net impairment
by £5.9m
• A decrease of 200bps in the gross margin rate in all years
for each territory would increase net impairment by £6.1m
• An increase of 10% in the year 1 sales growth for each
territory would decrease net impairment by £5.7m
• A decrease of 10% in the year 1 sales growth for each
territory would increase net impairment by £5.8m
• A 15% change in the central costs being allocated to the
store CGUs would increase net impairment by £3.1m
In addition, the Group has considered a range of reasonably
possible outcomes within the medium-term financial plan
period. The scenario modelled is consistent with the
sensitivities applied for the viability assessment, set out on
page 83. This would increase the net impairment charge
by £41.3m.
Onerous property related contracts provisions
Management has also assessed whether impaired and
unprofitable stores require an onerous provision for the
property related contracts. An onerous property related
contracts provision is recognised when the Group believes
that the unavoidable costs of meeting or exiting the property
related obligations exceed the benefits expected to be
received under the lease. The property related contracts
relate primarily to service charges. Onerous property related
contracts provisions are no longer recognised on fixed rental
expenses, following the transition to IFRS 16.
The calculation of the net present value of future cash flows
is based on the same assumptions for growth rates and
expected changes to future cash flows as set out above
for store impairments, discounted at the appropriate risk
adjusted rate. The costs of exiting property related contracts
as set out in the lease agreement, either at the end of the
lease or the lease break date (whichever is shorter), have
been considered in the calculation.
156
Superdry plc Annual Report 2021
156
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
2. Critical accounting judgements and key
sources of estimation uncertainty in applying
accounting policies continued
Recoverability of trade debtors
The impairment of trade and other receivables is based on
management’s estimate of the ECL. These are calculated
using the Group’s historical credit loss experience, with
adjustments for general economic conditions and an
assessment of conditions at the reporting date. The
estimation uncertainty relates to the allowance for
expected credit losses of £8.6m, which includes a
specific provision and an ECL provision.
The specific provision of £6.0m is calculated for higher risk
trade receivables, relating to customers who have balances
over £30k that are at least 30 days overdue. This provision
is calculated based on a specific review of the exposure to
each customer, net of credit enhancements and taking into
consideration their payment history. There is a range of
possible outcomes for the specific provision; an indication
of the maximum possible exposure is that the specific
provision of £6.0m covers gross debtors of £10.5m.
The ECL provision of £2.6m is calculated for the aggregated
remaining debtors profiled by country, net of credit
enhancements, and assuming country-specific default rates.
The country-specific default rates were prepared using
externally generated data which reflects the higher credit
risk of the Group’s debtor book, taking into consideration
the impact of the Covid-19 pandemic. A range of possible
outcomes for the ECL provision using a range of 60-90%
insurance recoveries and 5-20% probability of default gives
an ECL provision of £1.0m to £4.8m.
See notes 24 and 34 for further details.
Uncertain tax position
The Group is subject to tax laws in a number of jurisdictions
and given the scale of its operations, it is subject to periodic
challenges by local tax authorities on a range of tax matters.
The Group’s transfer pricing policies aim to allocate profits
and losses to each operating entity on an arm’s length basis.
In the past two years, the Group has experienced an already
challenging retail environment, exacerbated by the business
disruption caused by the global Covid-19 pandemic.
It is uncertain how different tax authorities may view the
impact of the pre-Covid challenging trading environment,
and the challenges presented by Covid on the Group’s
internal transfer pricing policies.
Given this uncertainty, the Group has recognised a net
£1.3m provision (2020: £nil) in respect of uncertain tax
positions as required under IAS 12, with due consideration to
guidance contained within IFRIC 23. The key estimate in this
provision is the possible level of adjustment required by each
jurisdiction. A range of possible outcomes for this provision
is £nil to £4m.
Further details are included in note 22.
Critical judgements in applying the Group’s
accounting policies
Management consider that judgements made in the process
of applying the Group’s accounting policies that could have
a significant effect on the amounts recognised in the Group
financial statements are as follows:
Attributing Ecommerce sales and costs to stores
Judgement is required to determine whether Ecommerce
sales (and associated costs) could be attributed to stores
for the purposes of impairment testing when calculating the
value in use of each store CGU. The basis of such attribution
is considered difficult to determine, due to insufficient
evidence to reliably estimate. For this reason, Ecommerce
sales attributable to stores have not been calculated. The
continuation of Ecommerce sales during the period of Covid-
19 enforced store closures further supports this judgement.
Store impairment judgements
Store assets (as with other financial and non-financial
assets) are subject to impairment based on whether
current or future events and circumstances suggest that
their recoverable amount may be less than their carrying
value. The impairment review involves critical accounting
judgements, in addition to the significant estimates
discussed above.
The medium-term financial plan is prepared on a ‘top down’
basis and has been attributed to individual stores based on
their historic performance relative to the rest of the store
estate, as well as the store’s sensitivity to the impact of the
Covid-19 pandemic. Judgement is involved in this revenue
and cost attribution exercise in defining the parameters of
the store characteristics. The outcome of this exercise
affects the value in use associated with each store CGU.
Similarly, judgement is required in determining which
central costs are directly involved in the store operations
and therefore should be apportioned to each store CGU.
Central costs are attributed to store CGUs where they
can be allocated on a reasonable and consistent basis.
Judgement is also involved in defining the lease term used
in the store impairment calculations. Lease extensions have
only been assumed in the modelling where they have been
agreed with landlords.
Adjusting items
Judgements are required as to whether items are
disclosed as adjusting items, with consideration given to
both quantitative and qualitative factors. Further information
about the determination of adjusting items in financial year
2021 is in note 36.
157
Superdry plc Annual Report 2021
157
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
3. New accounting pronouncements
The accounting policies set out have been applied
consistently throughout the Group and to all years
presented in these consolidated accounts except if
mentioned otherwise. For the financial year 2021, the
following amendments were adopted by the Group:
New accounting standards in issue but not yet effective
At the date of authorisation of these financial statements,
the Group has not applied the following new and revised
IFRs Standards that have been issued but are not
yet effective:
• IFRS 17 Insurance Contracts;
• Amendments to References to the Conceptual Framework
in IFRS Standards.
• Amendments to IFRS 3: Definition of a Business.
• IFRS 10 and IAS 28 (amendments): Sale or Contribution
of Assets between an Investor and its Associate or
Joint Venture;
• Amendments to IAS 1 and IAS 8: Definition of Material.
• Amendments to IAS 1: Classification of Liabilities as
Current or Non-current;
• Amendments to IFRS 3: Reference to the
Conceptual Framework;
• Amendments to IAS 16: Property, Plant and Equipment –
Proceeds before Intended Use;
• Amendments to IAS 37: Onerous Contracts – Cost of
Fulfilling a Contract; and
• Annual Improvements to IFRS Standards 2018-2020 Cycle.
The application of these new standards and amendments is
not expected to have a material impact on the Group.
The Group also elected to adopt the following
amendment early:
• Amendment to IFRS 16 Covid-19-Related
Rent Concessions.
The impact of early adopting the amendment to IFRS 16 is
described below. The adoption of the other standards and
interpretations listed above has not led to any changes to
the Group’s accounting policies or had any other material
impact on the financial position or performance of
the Group.
IFRS 16: Covid-19-Related Rent Concessions
The Group has applied Covid-19-Related Rent Concessions,
as permitted under amended IFRS 16, issued by the IASB in
May 2020. The practical expedient is only applicable to rent
concessions provided as a direct result of the Covid-19
pandemic with no other substantive changes to other
terms and condition of the lease.
The practical expedient applies only to rent concessions
occurring as a direct consequence of Covid-19 and only if
all the following conditions are met:
a. The change in lease payments results in revised
consideration for the lease that is substantially the
same as, or less than, the consideration for the lease
immediately preceding the change;
b. Any reduction in lease payments affects only payments
originally due in on or before 30 June, 2021 (a rent
concession meets this condition if it results in reduced
lease payments on or before 30 June, 2021, and increased
lease payments that extend beyond 30 June, 2021); and
c. There is no substantive change to other terms and
conditions of the lease.
Rent concessions meeting the criteria have been recognised
in the period to which they relate. Adoption of the practical
expedient has resulted in a £4.0m credit to the Group
operating loss (see note 5).
158
Superdry plc Annual Report 2021
158
Superdry plc Annual Report 2021 Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
4. Segment information
Revenue is generated from the same products (clothing and accessories) in all segments; the reporting of segments is based
on how these sales are generated. The accounting policies of the reportable segments are the same as the Group’s accounting
policies described in note 1. Gross profit is the measure reported to the Group’s CODM for the purpose of resource allocation
and assessment of segment performance. The Group derives its revenue from contracts with customers for the transfer of
goods and services at a point in time.
Change in segment reporting presentation
The Group’s operating segments have been modified during the reporting period. Previously, the operating segments were
defined as Retail and Wholesale, with Stores and Ecommerce being reported under the Retail segment. Due to an increase in
the sales mix of Ecommerce as a proportion of Retail (accelerated by Covid-19), the Group is focusing on this as a significant
channel of growth. Consequently, the level at which the Group’s CODM receives information to make decisions has changed,
and the Group is now reporting revenue and gross profit under three operating segments – Stores, Ecommerce and Wholesale.
The term ‘Retail’ will be used to define the total of the Ecommerce and Stores segments. The prior year comparatives have
been split to provide the same level of information for the three segments.
Segmental information for the business segments of the Group for financial years 2021 and 2020 is set out below. The ‘Retail’
subtotal of the ‘Stores’ and ‘Ecommerce’ segments presented below is considered useful additional information to the reader.
Total segment revenue
Less: inter-segment revenue
Revenue from external customers
Gross profit
(Loss)/profit before tax
Stores
2021
£m
Ecommerce
2021
£m
140.5
–
140.5
93.6
201.8
–
201.8
117.5
Retail
subtotal
2021
£m
342.3
–
342.3
211.1
(9.3)
Wholesale
2021
£m
Central costs
2021
£m
Group
2021
£m
731.9
(175.8)
556.1
293.1
–
–
–
–
(68.2)
(36.7)
389.6
(175.8)
213.8
82.0
40.8
The segment measure of profit required to be presented under IFRS 8 Segments is gross profit. (Loss)/profit before tax has
been presented as an additional profit measure which is considered to provide useful information to the reader since it allows
comparison of the Group’s results in FY21 with the Group’s results under the segmental structure in FY20 (where the ‘Stores’
and ‘Ecommerce’ segments were a single ‘Retail’ segment). Certain costs have not been allocated between the Stores and
Ecommerce segments in FY21.
The following additional information is considered useful to the reader:
Revenue
Retail
Wholesale
Total revenue
Operating loss
Retail
Wholesale
Central costs
Total operating loss
Net finance expense – Central costs
Net finance expense – Retail
(Loss)/profit before tax
Retail
Wholesale
Central costs
Total loss before tax
Adjusted*
2021
£m
Adjusting
items
£m
Reported
2021
£m
342.3
213.8
556.1
15.4
42.1
(62.9)
(5.4)
(1.7)
(5.5)
9.9
42.1
(64.6)
(12.6)
–
–
–
342.3
213.8
556.1
(19.2)
(1.3)
(3.6)
(24.1)
–
–
(19.2)
(1.3)
(3.6)
(24.1)
(3.8)
40.8
(66.5)
(29.5)
(1.7)
(5.5)
(9.3)
40.8
(68.2)
(36.7)
* Adjusted is defined as reported results before adjusting items and is further explained in note 36.
The net impairment losses and reversals on store assets and onerous property related contract charges amount to £15.8m and
all relate to the Retail segment.
159
Superdry plc Annual Report 2021
159
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
4. Segment information continued
Total segment revenue
Less: inter-segment revenue
Revenue from external customers
Gross profit
(Loss)/profit before tax
Stores
2020*
£m
Ecommerce
2020*
£m
287.2
–
287.2
192.5
151.6
–
151.6
90.5
Retail
subtotal
2020
£m
438.8
–
438.8
283.0
(125.1)
Wholesale
2020
£m
Central costs
2020*
£m
Group
2020
£m
949.7
(245.3)
704.4
377.9
–
–
–
–
(73.9)
(166.9)
510.9
(245.3)
265.6
94.9
32.1
* The 2020 balances have been split out to reflect the change in operating segments from Retail to Stores and Ecommerce.
The following additional information is considered useful to the reader:
Revenue
Retail
Wholesale
Total revenue
Operating (loss)/profit
Retail
Wholesale
Central costs
Total operating (loss)/profit
Net finance expense – Central costs
Net finance expense – Retail
Share of loss of investment – Central costs
(Loss)/profit before tax
Retail
Wholesale
Central costs
Total (loss)/profit before tax
Adjusted*
2020
£m
Adjusting
items
£m
Reported
2020
£m
438.8
265.6
704.4
5.3
31.4
(71.0)
(34.3)
(1.9)
(5.6)
–
(0.3)
31.4
(72.9)
(41.8)
–
–
–
(124.8)
0.7
(1.0)
(125.1)
–
–
–
(124.8)
0.7
(1.0)
(125.1)
438.8
265.6
704.4
(119.5)
32.1
(72.0)
(159.4)
(1.9)
(5.6)
–
(125.1)
32.1
(73.9)
(166.9)
* Adjusted is defined as reported results before adjusting items and is further explained in note 36.
Revenue from external customers in the UK and the total revenue from external customers from other countries are:
External revenue – UK
External revenue – Europe
External revenue – Rest of World
Total external revenue
Group
2021
£m
197.5
283.5
75.1
556.1
2020
£m
254.5
346.7
103.2
704.4
For all channels the geographic territories have been aligned to the internal management operational structure. In the prior
year Russia and Ukraine were included within Europe. In 2021 these territories have been reallocated to Rest of World in line
with the internal management structure. To ensure consistent comparatives, this methodology has been applied
retrospectively to 2020.
The total of non-current assets, other than deferred tax assets, located in the UK is £68.9m (2020: £84.5m), and the total of
non-current assets located in other countries is £93.6m (2020: £123.6m).
160
Superdry plc Annual Report 2021
160
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
5. Selling, general and administrative expenses
Staff costs (note 7)
Short-term and variable rent payments net of lease incentives and waivers
Depreciation and amortisation
Store impairment charges and reversals of property, plant and equipment, right-of-use assets
and intangibles
Non-store intangible asset impairments
Restructuring, strategic change and other costs
IFRS 16 Covid-19 rent concessions
Onerous property related contracts charge/(credit)
Other (including logistics costs, marketing, rates and service charges)
Total selling, general and administrative expenses
Group
2021
£m
81.9
3.9
53.4
10.7
2.1
1.0
4.0
5.1
178.9
341.0
2020
£m
103.3
2.4
87.2
139.1
–
1.9
–
(12.0)
217.2
539.1
Staff costs for 2020 include a credit of £0.4m which does not relate to employee expenses for the purpose of note 7.
Government grants for furlough support are netted off against staff costs, see note 37.
6. Adjusting items
The below adjustments are disclosed separately in the Group statement of comprehensive income and are applied to the
reported loss before tax to arrive at the adjusted loss before tax. Further information about the determination of adjusting items
in financial year 2021 is included in note 36.
Adjusting items
Unrealised (loss)/gain on financial derivatives
Net store asset impairment charges and reversals, and onerous property related contracts provision
Non-store intangible asset impairments
Restructuring, strategic change and other costs
IFRS 2 charge on Founder Share Plan (note 9)
Total adjusting items
Taxation
Tax impact of adjusting items (note 14)
Deferred tax on adjusting items (note 22)
Total taxation
Total adjusting items after tax
Group
2021
£m
(4.7)
(15.8)
(2.1)
(1.0)
(0.5)
(24.1)
–
3.9
3.9
2020
£m
1.9
(124.8)
–
(1.9)
(0.3)
(125.1)
0.1
17.3
17.4
(20.2)
(107.7)
Adjusting items before tax in the period totalled a charge of £24.1m in the year (2020: £125.1m charge).
Store asset impairment charges and reversals and onerous property related contracts provision
Comprehensive reviews have been performed in both the current and prior reporting periods across the owned store portfolio
to identify any stores which were either unprofitable, or where the anticipated future performance would not support the
carrying value of assets.
The prior period review, performed following the downgraded forecast in the medium-term plan driven by Covid-19, identified
stores which were either unprofitable, at risk of becoming unprofitable over time, or where anticipated future performance
would not support the carrying value of assets. The overall costs charged to the 2020 Group statement of comprehensive
income of non-cash impairments were £136.8m, affecting around 177 stores. In addition, the reassessment of the onerous
property related contracts provision resulted in a release of £12.0m, affecting around 35 stores. There were no releases of
impairment provisions against specific stores in the prior year.
161
Superdry plc Annual Report 2021
161
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
6. Adjusting items continued
A subsequent review was performed in the current period, resulting from the continuing impact of the Covid-19 pandemic
on trading performance across the store portfolio. This identified the need for an additional charge to the Group statement
of comprehensive income for non-cash impairments of £22.8m, affecting 125 stores. Additionally, there is a non-cash credit
of £12.1m in the Group statement of comprehensive income for the reversal of impairments that were recognised in previous
periods, where revised future cash flow projections now support the carrying value of 52 stores. This includes a £5.6m
impairment reversal for the Regent Street store. The total net impairment of £10.7m affects property, plant and equipment
and right-of-use assets. A significant level of estimation and judgement has been used to determine the charges and reversals,
for which further disclosure and sensitivities can be found in note 2 on pages 155 to 157.
A reassessment was also performed on the onerous property related contracts provision, resulting in a charge of £5.1m,
affecting around 30 stores. Onerous property related contracts provisions are no longer recognised on rental expenses,
following the transition to IFRS 16. A significant level of estimation has been used to determine the charges to be recognised,
for which further disclosure and sensitivities can be found in note 2 on pages 155 to 157.
Intangible asset impairments
The Group has recognised impairment charges in the period for website and software intangible assets. A review was
performed during the period over website and software intangible assets which are likely to be replaced or upgraded in the
foreseeable future, leading to an impairment of £2.1m. This is considered to be an adjusting item due to the one-off nature of
this review.
Restructuring, strategic change and other costs
Adjusting items include £1.4m (2020: £nil) resulting from the restructuring programme announced in the FY20 Group Annual
Report. This restructuring included redundancies in order to make the Group fit for the future. The Directors consider these to
be adjusting items due to their one-off nature.
During the prior year, the Board and the Executive Committee reviewed the long-term business plan for the Trendy & Superdry
Holding Limited joint venture. Following discussions with the joint venture partner and considering the challenging retail
environment due to Covid-19, both parties agreed to end the relationship. Costs for the wind-up of the business totalling £1.5m
were accrued for in 2020; these were adjusting items based on the one-off nature of this decision. A credit of £0.4m has been
recognised in the current year for unutilised accrued amounts.
Unrealised gain/(loss) on financial derivatives
A £4.7m charge has been recognised within adjusting items in respect of the fair value movement in financial derivatives (2020:
£1.9m credit), which has been driven primarily by the timing of derivatives and the strong Sterling position against the US Dollar
at the year-end, and its impact on forward currency contracts, buying US Dollar with Sterling or selling Euro for Sterling (see
notes 34 and 36 for further details).
IFRS 2 charge on Founder Share Plan
The IFRS 2 charge of £0.5m (2020: £0.3m) in respect of the Founder Share Plan is also included within adjusting items
(see notes 9 and 36 for further details).
Tax on adjusting items
The net tax credit on adjusting items totals £3.9m (2020: £17.4m credit). An adjusting tax credit of £1.4m (2020: £16.7m credit)
arises as a result of impairments to the right-of-use assets, a £0.3m adjusting tax credit (2020: £1.5m credit) as a result of
impairments to property, plant and equipment at the balance sheet date, and an adjusting tax credit of £2.2m (2020: £0.8m
charge) arises in connection with movements on the derivative contracts and an updated onerous lease review.
162
Superdry plc Annual Report 2021
162
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
7. Employee expense
Wages and salaries
Social security costs
Share awards charge
Pension costs – defined contribution scheme
Total employee expense
Group
Company
2021
£m
69.0
9.4
1.3
2.2
81.9
2020
£m
89.1
11.1
1.2
2.3
103.7
2021
£m
11.3
1.5
0.5
0.4
13.7
2020
£m
12.1
1.7
0.2
0.5
14.5
Details of the share-based compensation plans are detailed under notes 8 and 9.
The total employee expense figures are net of furlough income received, per note 37.
When compared to note 5, the 2020 total employee expense did not include £0.4m which had been credited within
adjusting items.
The closing pension creditor for the Group is £0.5m (2020: £0.4m).
The average monthly number of full-time equivalent employees, including Directors on a service contract, are as follows:
Administration
Retail
Total average headcount
Group
Company
2021
No.
674
2,148
2,822
2020
No.
722
2,494
3,216
2021
No.
197
57
254
2020
No.
208
77
285
Directors’ remuneration is detailed in the Directors’ Remuneration Report on pages 104 to 123.
Remuneration of Key Management Personnel, being the Executive Directors, Chief Marketing Officer, Chief Operating Officer,
Creative Director, Group General Counsel & Company Secretary, Group HR Director, Logistics and Business Transformation
Director, Global Sourcing and Sustainability Director, Merchandising Director, Group Retail Director and Group Wholesale
Director, is recorded in the Group statement of comprehensive income. This excludes payments to the Interim Chief Financial
Officer during the year. Remuneration of the key members of management is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
Payment for loss of office
Total remuneration of Key Management Personnel
Group
2021
£m
3.3
0.3
0.3
0.1
4.0
2020
£m
3.1
0.3
0.5
–
3.9
The total amounts for Directors’ remuneration in accordance with Schedule 5 to the Accounting Regulations were as follows:
Short-term employee benefits
Share-based payments
Money purchase pension contributions
Total aggregate Directors’ remuneration
Group
2021
£m
1.1
–
0.1
1.2
2020
£m
1.4
–
0.1
1.5
163
Superdry plc Annual Report 2021
163
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
8. Share-based Long-Term Incentive Plans (LTIP)
Share awards are granted to employees in the form of equity-settled awards and cash-settled awards.
Performance Share Plan
The award of shares is made under the Superdry Performance Share Plan (PSP). Shares have no value to the participant at
the grant date, but subject to the conditions of the specific scheme can convert and give participants the right to be granted
nil-cost shares at the end of the performance period.
The vesting period of these schemes is between two and three years. Share awards will also expire if the employee leaves the
Group prior to the exercise or vesting date subject to the discretionary powers of the Remuneration Committee.
The movement in the number of these share awards outstanding is as follows:
At start of the period
Granted
Exercised
Forfeited
Cancelled
Total number of outstanding share awards at end of the period
None of the share awards were exercisable at the period end date (2020: nil).
Group and Company
2021
Weighted
average
exercise
price
2020
Number of
shares
2020
Weighted
average
exercise
price
684,868
–
– 1,026,040
–
–
(176,041)
–
(169,177)
–
– 1,365,690
–
–
–
–
–
–
2021
Number of
shares
1,365,690
2,158,592
–
(544,644)
(160,940)
2,818,698
The terms and conditions of the award of shares granted under the PSP during the year are as follows:
Grant date
October 2020
October 2020
Group and Company
Type of award
Number of
shares
Restricted share award
Restricted share award
1,491,157
667,435
Vesting
period
3 years
2 years
In 2021, the Company changed the award mechanism under the PSP from a scheme with market-based vesting criteria to a
Restricted Share Awards (RSA) plan with no performance or market-based vesting criteria attached. The shares granted during
the year are restricted share-based conditional awards. The fair value of the shares awarded at the grant date during the year
is £3.8m (2020: £2.9m), determined using the modified grant-date method. Shares awarded in previous years, which are still
within their vesting period, contain market-based vesting criteria such as diluted earnings per share and total shareholder
return performance targets. The fair value of these awards were determined at the grant date using a Black-Scholes
pricing model.
A charge of £1.0m (2020: £0.5m) has been recorded in the Group statement of comprehensive income during the year for
schemes under the PSP.
No share options were exercised during the period. The options outstanding at 24 April 2021 had a weighted average remaining
contractual life of 23 months (2020: 15 months); these shares have an exercise price of £nil (2020: £nil).
The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural considerations.
164
Superdry plc Annual Report 2021
164
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
8. Share-based LTIP continued
Cash-based conditional awards
Cash-settled share-based payments were granted in the year under the PSP. These are equivalent to the RSAs granted during
the year, but are to be settled through cash, rather than shares.
These awards have no value to the participant at the grant date, but subject to the conditions of the specific scheme can
convert and give participants the right to a cash settlement at the end of the performance period.
The vesting period of these schemes is two years. Cash-settled share awards will also expire if the employee leaves the Group
prior to the exercise or vesting date subject to the discretionary powers of the Remuneration Committee.
The terms and conditions of the award of cash-settled shares granted under the PSP during the year are as follows:
Grant date
October 2020
Type of award
Number of
shares
Vesting
period
Fair value at
grant date
Fair value at
reporting date
Group and Company
Cash-settled restricted share award
286,951
2 years
1.75
2.87
The movement in the number of share awards outstanding is as follows:
At start of the period
Granted
Forfeited
Total number of outstanding share awards at end of the period
None of the share awards were exercisable at the period end date (2020: nil).
Group and Company
2021
Number of
shares
–
286,951
(25,793)
261,158
2020
Number of
shares
–
–
–
–
The shares granted during the year are restricted share-based conditional awards. The terms and conditions of the award
specify that the fair value at the end of the performance period will be the lower of fair value on that date or a cap of twice the
grant price.
The fair value of the shares awarded at the grant date during the year was £0.5m (2020: £2.9m) and has been remeasured to
£0.7m (2020: £nil) at the reporting date. The fair value of the award is determined at the modified grant date and is remeasured
at each subsequent reporting period. The shares granted during the year did not contain any market-based vesting criteria.
A charge of £0.2m (2020: £nil) has been recorded in the Group statement of comprehensive income during the year for cash-
settled schemes under the PSP.
Save As You Earn
A Save As You Earn scheme is operated by the Group. No charge (2020: no charge) has been recorded in the Group statement
of comprehensive income during the year.
Buy As You Earn
A Buy As You Earn scheme is operated by the Group which commenced in August 2016. In the year 31,032 shares (2020:
15,540 shares) have been purchased under the scheme. The charge to the Group statement of comprehensive income is
immaterial and therefore has not been accounted for.
Other schemes
Share options were issued in the current and prior years as part of recruitment packages for certain members of senior
management. These options are subject to leavers’ provisions and the exercise period is up to two years. The charge to
the Group statement of comprehensive income in financial year 2021 for these awards is £0.1m (2020: £0.4m).
165
Superdry plc Annual Report 2021
165
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
9. Founder Share Plan
On 12 September 2017, the Founders of Superdry (the Founders), Julian Dunkerton and James Holder, announced the launch
of a long-term incentive scheme, the Founder Share Plan (FSP) under which they agreed to share increases in their wealth with
employees of the Group. The Founders had agreed to transfer into a fund 20% of their gain from any increase in the Group’s
share price over a threshold of £18.
The measurement period for the FSP ran from 1 October 2017 to 30 September 2020, and as such the measurement period for
the market-based vesting criteria expired over the course of the current year.
The gain to be transferred into the fund was to be calculated using the market value of the shares, calculated as the average
price of a Superdry plc share over the 20 dealing days prior to the maturity date (30 September 2020). When calculated, the
market value of the shares on maturity did not meet the minimum threshold of £18 and therefore FSP scheme did not meet
the vesting criteria.
IFRS 2 stipulates that there is no adjustment to the Group’s statement of comprehensive income where the scheme does not
vest due to a market-based condition, and so there is no adjustment required to recognise that the scheme will not vest.
The vesting period for the awards differed depending on the seniority of the colleagues in question. To be eligible for the award,
employees needed to remain in employment on the vesting date, details of which are as follows:
Share-settled element – Senior management
• 50% – 31 January 2021
• 50% – 31 January 2022
Cash and share-settled elements – All other colleagues
• 50% – 31 January 2021
• 50% – 31 July 2021
In accordance with IFRS 2 the FSP scheme has been accounted for as an equity-settled share-based payment scheme. The
fair value of the award is determined using a Monte Carlo pricing model.
The share-based payment charge associated with the FSP will accrue over five financial periods in line with the original vesting
period, up until financial year 2022.
A charge of £0.5m (2020: £0.3m) has been recorded in the Group statement of comprehensive income during the year.
The number of share awards granted in the period is nil. The number still in issue as at 24 April 2021 is 2,651,638, although
none of these have met the vesting criteria. These options have a nil exercise price.
10. Auditor remuneration
During the period, the Group obtained the following services from the Company’s auditor as detailed below:
Audit services
Fees payable to the Company’s auditor for the audit of the Company and the consolidated
financial statements
The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees payable to the Company’s auditor and its associates
Fees payable to the Company’s auditor and its associates for other services
Audit-related assurance services – interim review
All other services
Total fees payable to the Company’s auditor and its associates for other services
Total auditor’s remuneration
Group
2021
£’000
2020
£’000
2,350
150
2,500
–
–
–
1,500
250
1,750
200
–
200
2,500
1,950
166
Superdry plc Annual Report 2021
166
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
11. Other gains and losses (net)
Unrealised fair value (loss)/gain on foreign exchange forward contracts
Royalty income
Lease modifications and terminations
Other income
Total other gains and losses
Group
2021
£m
(4.7)
4.2
14.3
0.8
14.6
2020
£m
1.9
7.2
–
1.9
11.0
The unrealised fair value loss on foreign exchange forward contracts of £4.7m (2020: £1.9m gain) has been treated as an
adjusting item, see note 6.
Royalty income relates to wholesale royalty agreements, see note 1f for further detail. Other income in both financial years
includes rent and profit from the sales of fixtures and fittings to franchisees.
Lease modifications and terminations relate to lease renegotiations under IFRS 16, which resulted in reducing both the lease
liability and the right-of-use asset. As the adjustment exceeded the carrying value of the right-of-use asset, this excess has
been recognised as a gain in profit or loss. This represents non-cash movements under IFRS 16. See note 1i for further detail.
12. Operating (loss)/profit
Group operating (loss)/profit is stated after charging/(crediting):
Depreciation on property, plant and equipment – owned (note 18)
Depreciation on right-of-use assets (note 30)
Depreciation on deferred liability
Loss on disposal of property, plant and equipment (note 18)
Amortisation of intangible assets (note 19)
Impairment charges and reversals of property, plant and equipment and right-of-use assets (note 5)
Impairment of intangibles (note 5)
Restructuring, strategic change and other property costs (note 5)
Cost of inventories recognised as an expense
Net impairment of inventories included in the above figure (note 23)
Short-term and variable rent payments net of lease incentives and waivers (note 5)
Onerous property related contracts charge (note 5)
Government grants including furlough, gross of provision (note 37)
Covid-19 rent concessions
Impairment credit/(loss) on trade receivables (note 24)
Net foreign exchange (gain)/loss
Group
2021
£m
15.5
27.3
(0.4)
0.1
11.0
10.7
2.1
1.0
240.5
2.3
3.9
5.1
11.7
4.0
3.8
(0.5)
2020
£m
23.5
55.0
(0.4)
0.2
8.7
138.7
0.4
1.9
300.5
–
2.4
(12.0)
2.9
–
(9.2)
2.2
The above Group operating profit/(loss) includes £13.4m (2020: £10.2m) of depreciation savings on property, plant and
equipment and intangible assets, and £4.2m (2020: £6.5m) of onerous contract provision utilisation.
13. Finance income and expense
Bank interest
Total finance income
Bank interest
Interest on lease liabilities
Total finance expense
Group
2021
£m
–
–
(1.7)
(5.5)
(7.2)
2020
£m
0.2
0.2
(2.0)
(5.7)
(7.7)
167
Superdry plc Annual Report 2021
167
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
14. Tax expense
The tax expense comprises:
Current tax
• UK corporation tax charge for the period
• Adjustment in respect of prior periods
• Overseas tax
Adjusting tax (credit)/expense
Total current tax (credit)/expense
Deferred tax
• Origination and reversal of temporary differences
• Deferred tax asset movements in respect of tax losses
• Adjustment in respect of prior periods
Adjusting tax (credit)/expense
Total deferred tax (credit)/expense
Total tax (credit)/expense
Group
2021
£m
–
(0.9)
0.8
–
(0.1)
7.9
(7.7)
3.2
(3.9)
(0.5)
(0.6)
2020
£m
–
(6.1)
1.8
(0.1)
(4.4)
(1.0)
(5.8)
5.0
(17.3)
(19.1)
(23.5)
The tax credit on adjusted loss is £0.1m (2020: £4.4m credit). The net tax credit on adjusting items totals £3.9m (2020: £17.4m
tax credit), which includes a prior period charge of £0.4m.
An adjusting tax credit of £1.4m arises as a result of impairments to the right-of-use asset values, a £0.3m adjusting tax credit
as a result of impairments to property, plant and equipment, at the balance sheet date and an adjusting tax credit of £2.2m
arises in connection with movements on the derivative contracts and an updated onerous lease review.
Factors affecting the tax expense for the period are as follows:
(Loss)/profit before tax
(Loss)/profit multiplied by the standard rate in the UK – 19.0% (2020: 19.0%)
Uncertain tax position
Permanent differences
Overseas tax differentials
Deferred tax not recognised
Change in overseas tax rates
Effect of tax rate changes
Adjustment in respect of prior periods
Total tax (credit)/expense excluding adjusting items
Group
2021
£m
(36.7)
(7.0)
1.3
0.8
(1.0)
2.4
–
0.2
2.7
(0.6)
2020
£m
(166.9)
(31.7)
–
1.2
(10.9)
19.6
–
(0.6)
(1.1)
(23.5)
The Group’s tax credit on adjusted losses of £3.3m (2020: £6.1m loss) represents an effective tax rate of 26.2% (2020: 14.6%)
and the Group’s tax credit on adjusting losses of £3.9m (2020: £17.4m loss) represents an effective tax rate of 16.2% (2020:
13.9%). Taken together the Group’s tax credit of £0.6m (2020: £23.5m credit) represents a total effective tax rate of 1.6%
(2020: 14.1%) for the period ended 24 April 2021. The Group’s total effective tax rate of 1.6% is lower than the statutory
rate of tax of 19%.
This is primarily due to the level of overseas losses in relation to which no tax benefit has been recognised, movements in
amounts recognised in respect of leases, and the creation of a provision for uncertain tax positions.
Post 24 April 2021, Finance Bill 2021 substantively enacted provisions to increase the main rate of UK corporation tax to 25%
from 1 April 2023. This was not enacted on the balance sheet date, 24 April 2021. Deferred tax balances relating to the UK as at
24 April 2021 have been measured at a rate of 19%. If we were to restate the deferred tax assets at 24 April 2021 using the 25%
future rate, the maximum potential impact would be an increase to the deferred tax asset recognised by c.£12.8m.
168
Superdry plc Annual Report 2021
168
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
15. Loss attributable to Superdry plc
The loss after tax for the 52 weeks ended 24 April 2021 for the Company was £12.6m (52 weeks ended 25 April 2020: loss
of £148.0m). There was a credit to equity reserve of £1.6m (2020: £1.2m credit) in respect of employee share schemes. The
Directors have approved the statement of comprehensive income for the Company. Retained earnings of the Company at
24 April 2021 were £61.3m (2020: £72.2m).
16. Earnings per share
Earnings
Loss for the period attributable to owners of the Company
Number of shares at year-end
Weighted average number of ordinary shares – basic
Effect of dilutive options and contingent shares
Weighted average number of ordinary shares – diluted
Basic earnings per share (pence)
Diluted earnings per share (pence)
Adjusted earnings per share
Earnings
Adjusted (loss)/profit for the period attributable to the owners of the Company
Weighted average number of ordinary shares – basic
Weighted average number of ordinary shares – diluted
Adjusted basic earnings per share (pence)
Adjusted diluted earnings per share (pence)
Group
2021
£m
(36.1)
No.
2020
£m
(143.4)
No.
82,041,820
82,028,188
–
82,028,188
82,010,788
82,001,955
387,495
82,389,450
(44.0)
(44.0)
(174.9)
(174.1)
Group
2021
£m
(15.9)
No.
2020
£m
(35.7)
No.
82,028,188
82,028,188
82,001,955
82,389,450
(19.4)
(19.4)
(43.5)
(43.3)
As at 24 April 2021, 1,528,214 other share options were outstanding that could potentially dilute basic EPS in the future but
were not included in the calculation of diluted EPS as they are antidilutive for the periods presented. There is no dilutive effect
from the FSP scheme (note 9).
Due to the loss-making position of the Group at the year end, all potential ordinary shares are antidilutive.
There were no share-related events after the balance sheet date that may affect earnings per share.
17. Dividends
Equity – ordinary shares
Interim for the 52 weeks to 24 April 2021 – nil (2020: 2.0p per share)
Final dividend for the 52 weeks to 25 April 2020 – nil (2020: 2.2p per share)
Total dividends paid
Group and Company
2021
£m
–
–
–
2020
£m
1.6
1.8
3.4
Given the ongoing uncertainty and in order to maintain liquidity, the Board did not propose an interim dividend and has made
the decision not to recommend a final dividend for 2021.
169
Superdry plc Annual Report 2021
169
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
18. Property, plant and equipment
Movements in the carrying amount of property, plant and equipment were as follows:
52 weeks ended 24 April 2021
Cost
At 26 April 2020
Exchange differences
Additions
Disposals
At 24 April 2021
Accumulated depreciation and impairments
At 26 April 2020
Exchange differences
Disposals
Depreciation charge
Net impairment charges and reversals
At 24 April 2021
Net book value at 24 April 2021
Land and
buildings
£m
Leasehold
improvements
£m
Group
Furniture,
fixtures and
fittings
£m
Computer
equipment
£m
Total
£m
5.3
–
–
–
5.3
1.0
–
–
0.1
–
1.1
4.2
213.5
(2.6)
2.3
(8.3)
204.9
190.1
(2.4)
(8.2)
9.5
2.8
191.8
13.1
66.4
(0.8)
3.5
(2.0)
67.1
55.2
(0.8)
(2.0)
5.1
0.5
58.0
9.1
30.1
(0.3)
1.0
(0.2)
315.3
(3.7)
6.8
(10.5)
30.6
307.9
27.3
(0.3)
(0.2)
0.8
–
27.6
3.0
273.6
(3.5)
(10.4)
15.5
3.3
278.5
29.4
The above property, plant and equipment net impairment movement of £3.3m constitutes part of the total net impairment of
£10.7m in 2021 (2020: £136.8m) and relates to an impairment review performed on store assets. For further details on this
please see notes 2 and 6. This impairment has been included within adjusting items in the year.
52 weeks ended 25 April 2020
Cost
At 28 April 2019
Exchange differences
Additions
Disposals
Reclassified as held for sale
At 25 April 2020
Accumulated depreciation and impairments
At 28 April 2019
Exchange differences
Depreciation charge
Net impairment charges and reversals
Disposals
At 25 April 2020
Net book value at 25 April 2020
Land and
buildings
£m
Leasehold
improvements
£m
Group
Furniture,
fixtures and
fittings
£m
Computer
equipment
£m
Total
£m
5.3
–
–
–
–
5.3
0.5
–
0.1
0.4
–
1.0
4.3
212.5
2.2
1.6
(2.8)
–
213.5
164.7
1.6
13.3
13.1
(2.6)
190.1
23.4
63.6
0.5
2.7
(0.4)
–
66.4
46.3
0.4
6.7
2.2
(0.4)
55.2
11.2
27.8
0.2
2.2
(0.1)
–
30.1
23.6
0.2
3.4
0.2
(0.1)
27.3
2.8
309.2
2.9
6.5
(3.3)
–
315.3
235.1
2.2
23.5
15.9
(3.1)
273.6
41.7
Of the above impairment of £15.9m, £15.5m constitutes part of the total impairment of £136.8m in 2020 and relates to an
impairment review performed on retail store assets; for further details on this please see note 2. This impairment has been
included within adjusting expenses in the year. The remaining £0.4m relates to impairment of land during the year as a result
of a revaluation triggered by the land sale in 2019. This land impairment has been included within adjusted expenses in the year
as the disposal was undertaken through the normal course of business.
170
Superdry plc Annual Report 2021
170
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
18. Property, plant and equipment continued
52 weeks ended 24 April 2021
Cost
At 26 April 2020
Additions
Disposals
At 24 April 2021
Accumulated depreciation
At 26 April 2020
Depreciation charge
Disposals
Net impairment charges and reversals
At 24 April 2021
Net book value at 24 April 2021
52 weeks ended 25 April 2020
Cost
At 28 April 2019
Exchange difference
Additions
Disposals
At 25 April 2020
Accumulated depreciation
At 28 April 2019
Depreciation charge
Net impairment charges and reversals
At 25 April 2020
Net book value at 25 April 2020
Land and
buildings
£m
Leasehold
improvements
£m
Company
Furniture,
fixtures and
fittings
£m
Computer
equipment
£m
Total
£m
1.9
–
–
1.9
0.5
–
–
–
0.5
1.4
11.0
0.2
(1.3)
9.9
9.0
0.8
(0.8)
0.1
9.1
0.8
3.8
1.1
(0.4)
4.5
2.8
0.4
(0.3)
–
2.9
1.6
18.5
1.2
–
19.7
17.7
0.3
–
–
18.0
1.7
Land and
buildings
£m
Leasehold
improvements
£m
Company
Furniture,
fixtures and
fittings
£m
Computer
equipment
£m
1.5
–
0.4
–
1.9
–
0.1
0.4
0.5
1.4
10.7
0.1
0.3
(0.1)
11.0
7.1
1.4
0.5
9.0
2.0
3.7
–
0.1
–
3.8
2.3
0.5
–
2.8
1.0
17.3
–
1.2
–
18.5
15.6
2.1
–
17.7
0.8
35.2
2.5
(1.7)
36.0
30.0
1.5
(1.1)
0.1
30.5
5.5
Total
£m
33.2
0.1
2.0
(0.1)
35.2
25.0
4.1
0.9
30.0
5.2
171
Superdry plc Annual Report 2021
171
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
19. Intangible assets
52 weeks ended 24 April 2021
Cost
At 26 April 2020
Exchange differences
Additions
Disposals
At 24 April 2021
Accumulated amortisation
At 26 April 2020
Exchange differences
Amortisation charge
Impairment charges
Disposals
At 24 April 2021
Net book value at 24 April 2021
Trademarks
£m
Website and
software
£m
Lease
premiums
£m
Distribution
agreements
£m
Goodwill
£m
Total
£m
Group
4.3
–
1.0
–
5.3
2.9
–
0.4
–
–
3.3
2.0
54.2
–
6.0
–
60.2
31.1
–
10.3
2.1
–
43.5
16.7
14.3
–
–
(0.1)
14.2
14.3
–
–
–
(0.1)
14.2
–
15.7
(0.8)
–
–
14.9
13.3
(0.2)
0.3
–
–
13.4
1.5
21.5
–
–
–
21.5
–
–
–
–
–
–
21.5
110.0
(0.8)
7.0
(0.1)
116.1
61.6
(0.2)
11.0
2.1
(0.1)
74.4
41.7
The above impairment charge of £2.1m relates to an impairment review performed on website and software assets. For further
details on this please see notes 2 and 6. This impairment has been included within adjusting items in the year.
Trademarks
£m
Website and
software
£m
Lease
premiums
£m
Distribution
agreements
£m
Goodwill
£m
Total
£m
Group
52 weeks ended 25 April 2020
Cost
At 28 April 2019
Reclassified under transition to IFRS 16
Exchange differences
Additions
At 25 April 2020
Accumulated amortisation
At 28 April 2019
Exchange differences
Amortisation charge
Impairments
At 25 April 2020
Net book value at 25 April 2020
3.8
–
–
0.5
4.3
2.5
–
0.4
–
2.9
1.4
47.5
–
–
6.7
54.2
23.4
–
7.7
–
31.1
23.1
15.9
(1.6)
–
–
14.3
13.9
–
–
0.4
14.3
–
15.4
–
0.3
–
15.7
12.5
0.2
0.6
–
13.3
2.4
21.2
–
0.3
–
21.5
–
–
–
–
–
21.5
103.8
(1.6)
0.6
7.2
110.0
52.3
0.2
8.7
0.4
61.6
48.4
172
Superdry plc Annual Report 2021
172
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
19. Intangible assets continued
52 weeks ended 24 April 2021
Cost
At 26 April 2020
Additions
At 24 April 2021
Accumulated amortisation
At 26 April 2020
Amortisation charge
Impairment charges
At 24 April 2021
Net book value at 24 April 2021
52 weeks ended 25 April 2020
Cost
At 28 April 2019
Additions
At 25 April 2020
Accumulated amortisation
At 28 April 2019
Amortisation charge
At 25 April 2020
Net book value at 25 April 2020
Company
Website and
software
£m
Trademarks
£m
0.7
0.1
0.8
0.2
0.1
–
0.3
0.5
40.6
2.2
42.8
24.8
7.0
1.6
33.4
9.4
Company
Website and
software
£m
Trademarks
£m
0.6
0.1
0.7
0.1
0.1
0.2
0.5
35.9
4.7
40.6
19.4
5.4
24.8
15.8
Total
£m
41.3
2.3
43.6
25.0
7.1
1.6
33.7
9.9
Total
£m
36.5
4.8
41.3
19.5
5.5
25.0
16.3
Amortisation of intangible assets is included within selling, general and administrative expenses in the Group statement of
comprehensive income.
Impairment of goodwill
Goodwill of £21.5m is split between the Group’s operating segments as £14.3m for Wholesale, £4.7m for Ecommerce and
£2.5m for Stores.
The operating segments of the Group were revised during the reporting period, as disclosed in note 4. The goodwill balance at
25 April 2020 of £21.5m was previously split into £14.3m for Wholesale and £7.2m for Retail; this is equivalent to £14.3m for
Wholesale, £3.6m for Ecommerce and £3.6m for Stores under the revised reporting structure. The reallocation within the
affected unit was performed using a relative value approach.
An impairment test is a comparison of the carrying value of assets of a business or cash generating unit (CGU) to their
recoverable amount. The Group monitors goodwill for impairment at a segmental level. Wholesale and Ecommerce are defined
as individual CGUs, and the Stores segment is a group of CGUs. These segments represent the lowest level within the Group at
which goodwill is monitored for internal management purposes.
The recoverable amount is estimated based on using a value in use model using discounted cash flows. Where the recoverable
amount is less than the carrying value, an impairment results. The Group’s medium-term plan has been used as the basis for
this calculation.
As identified in note 6, store assets have been impaired in the current year, where each store is assessed as an individual CGU.
Goodwill is monitored at a total Stores segment level, not at an individual store level, and instead includes individually profitable
stores in the assessment. Additionally, the cash flows in the goodwill impairment analysis are included over a 10-year period,
compared to the lease expiry period in the store impairment assessment.
173
Superdry plc Annual Report 2021
173
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
19. Intangible assets continued
Key assumptions
In determining the recoverable amount, it is necessary to make a series of assumptions to estimate the present value of future
cash flows. In each case, these key assumptions have been made by management reflecting historical performance and are
consistent with relevant external sources of information.
Discount rates
Management estimates discount rates using pre-tax rates that reflect the current market assessment of the time value of
money and the risks specific to the CGUs. The pre-tax discount rate of 11.6% (2020: 10.1%) is derived from the Group’s post-tax
weighted average cost of capital of 10.9% (2020: 9.8%).
Operating cash flows
The key assumptions within the forecast operating cash flows include the growth rates in both sales and gross profit
margins, changes in the operating cost base and the level of capital expenditure, as set out in the medium-term financial plan.
Judgement is also required in determining an appropriate allocation of central costs. Central costs have been allocated where
there is a reasonable and consistent basis for apportionment.
Long-term growth rates
To forecast beyond the Group’s medium-term plan, long-term average growth rates ranging from 0% to 2.0% (2020: 2.2%)
have been used. The recoverable amount of each subsidiary is calculated in reference to the value over the medium-term
financial plan period, extrapolated for an additional five years at the long-term growth rate of 2.0% (2020: additional five years
at 2.1%).
Goodwill sensitivity analysis
The results of the Group’s impairment tests are dependent on estimates made by management, particularly in relation to the
key assumptions described above. A sensitivity analysis as to potential changes in key assumptions has been performed, using
a version of the medium-term financial plan adjusted for the reverse stress test scenario referred to in the Viability Statement in
the CFO Review on page 83. The present values of the future cash flows of the Stores, Ecommerce and Wholesale CGUs are
significant and are insensitive to any reasonably possible changes to key assumptions.
174
Superdry plc Annual Report 2021
174
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
20. Investments
52 weeks ended 24 April 2021
Cost
At 26 April 2020
Additions
At 24 April 2021
Provision for impairment
At 26 April 2020
Write-downs
At 24 April 2021
Net balance sheet amount at 24 April 2021
Company
24 April
2021
£m
467.5
4.5
472.0
210.0
1.6
211.6
260.4
25 April
2020
£m
463.0
4.5
467.5
51.3
158.7
210.0
257.5
The total net book value of investments is £260.4m (2020: £257.5m). During 2021, an investment of £3.1m was made in
SuperGroup Sweden AB as a capital injection. An addition of £1.4m (2020: £0.3m) has been recorded in relation to the IFRS 2
charges, that are accounted for in Group subsidiaries but relate to shares in the ultimate parent, being Superdry plc.
An IFRS 9 loan loss allowance on intercompany receivables of £25.2m (2020: £26.5m) and an impairment charge of £1.6m
(2020: £158.7m) on the Group’s investment in subsidiary undertakings has been recognised. The loss allowance is based on
the calculated NPV of the subsidiary compared to the intercompany balance. There is a difference between the Group and
Company net assets due to the impairment in the Company being determined using the cash flows in the Group medium-term
financial plan across all channels extrapolated for a further five years, whereas the retail cash flows used for the impairment of
fixed assets and right-of-use assets in the Group balance sheet is limited to the existing lease term, which on average is
four years.
See note 24 for details of the IFRS 9 loan loss allowance.
Impairment of investments in subsidiary undertakings
The Company tests investments in subsidiary undertakings annually for impairment.
The recoverable amount of each subsidiary is calculated in reference to the value over the medium-term financial plan period,
extrapolated for an additional five years at the long-term growth rate of 2.0% (adjusting for any intercompany impairment as
explained in note 24). This recoverable amount is calculated using a value in use model based on the discounted cash flows.
The recoverable amount is compared to the investment carrying value and any difference recorded as impairment.
Management estimates discount rates using pre-tax rates that reflect the current market assessment of the time value of
money and the risks specific to the CGUs. The pre-tax discount rates range from 12.6% to 15.1% (2020: 9.5% to 11.5%) and
are derived from the Group’s post-tax WACC which range from 10.0% to 11.6% (2020: 9.4% to 11.4%).
This review has led to an impairment of £1.6m being recognised in the Stores segment for subsidiaries, being a £1.2m
impairment of SuperGroup Sweden AB and £0.4m impairment of C-Retail Limited. An equivalent review was performed in
the prior reporting period, which resulted in an impairment of £41.0m being recognised in respect of subsidiaries in the Stores
segment, £59.9m in respect of subsidiaries in the Ecommerce segment and £57.8m in respect of subsidiaries in the Wholesale
segment. No circumstances in the current year support the previously recognised impairment being reversed.
175
Superdry plc Annual Report 2021
175
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
20. Investments continued
Subsidiaries
All of the subsidiaries have been included in the consolidated financial statements. A list of the subsidiaries held during the
year is set out below (registered office addresses are included within note 39):
Subsidiary
Principal activity
Country of
incorporation
2021
% shares
C-Retail Limited1 – (07139142)
DKH Retail Limited1,4 – (07063508)
SuperGroup Belgium NV1
SuperGroup Belgium Finance NV1
SuperGroup Concessions Limited1 – (07139101)
SuperGroup Europe BVBA
Superdry France SARL1
Superdry Germany GmbH1,3
SuperGroup India Private Limited1
SuperGroup Internet Limited1,7 – (07139044)
SuperGroup Netherlands BV
SuperGroup Netherlands Retail BV
SuperGroup Retail Spain S.L.U.1,2
SuperGroup Retail Ireland Limited1
SuperGroup Mumessillik Hizmet ve Ticaret
Limited Sirketi1
SuperGroup Limited1,6 – (07938117)
Superdry Hong Kong Limited1
Superdry Sweden AB1
Superdry Norway A/S1
Superdry Retail Denmark A/S1
Superdry Nordic and Baltics A/S1
SD 1 Aps
SD 2 Aps
Superdry Retail LLC5
Superdry Wholesale LLC5
SuperGroup USA Inc1,5
Clothing retailer in UK
Worldwide wholesale distribution
Holds the investment in SuperGroup
Netherlands BV
Provides finance to the European entities
Clothing retailer in concessions
Clothing retailer in Belgium
Clothing retailer in France
Clothing retailer in Germany
Manages supplier relationships in India
Clothing retailer via the Internet
Holds the investment in SuperGroup
Europe BVBA
Clothing retailer in the Netherlands
Clothing retailer in Spain
Clothing retailer in the Republic of Ireland
Manages supplier relationships in Turkey
Dormant
Manages supplier relationships in China
Clothing retailer in Sweden
Norway wholesale agent
Clothing retailer in Denmark
Denmark wholesale agent
Clothing retailer in Denmark
Dormant
Clothing retailer in USA
USA wholesale distribution
Holds investment in USA
UK
UK
Belgium
Belgium
UK
Belgium
France
Germany
India
UK
Netherlands
Netherlands
Spain
ROI
Turkey
UK
Hong Kong
Sweden
Norway
Denmark
Denmark
Denmark
Denmark
USA
USA
USA
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1. Directly owned by the Company.
2. Holds the investment in the Portuguese branch which is not material.
3. Holds the investment in the Austrian branch which is not material.
4. Holds the investment in the Switzerland and Norway branches which are not material.
5. Exempt from statutory audit.
6. Exempt from statutory audit under s448A exemption.
7. Exempt from statutory audit under s479A exemption.
All shares held by the Company are ordinary equity shares.
SuperGroup Internet Limited (company number 07139044) will take advantage of the audit exemption set out within section
479A of the Companies Act 2006 for the period ended 24 April 2021. SuperGroup Internet Limited is 100% owned directly
by Superdry plc. In accordance with section 479C of the Companies Act 2006, the Company will guarantee the debts and
liabilities of SuperGroup Internet Limited.
176
Superdry plc Annual Report 2021
176
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
20. Investments continued
Joint ventures
Set out below are the joint ventures of the Group as at 24 April 2021. The joint ventures have share capital consisting solely
of ordinary shares, 50% of which are held directly by the Group. The country of incorporation is also their principal place
of business.
Name of entity
Trendy & Superdry Holding Limited
Horace SARL (France)
Year-end
Country of incorporation
Ownership
interest
% shares
Measurement
method
24 April
31 Dec
Hong Kong
France
50
50
Equity
Equity
The non-coterminous year end for Horace SARL (France) was historically determined and is of no material consequence to
the Group.
As at 24 April 2021, the carrying value of the investment in Trendy & Superdry Holding Limited and Horace SARL was £nil.
Under equity accounting, no charge was recognised in the financial statements in respect of the Group’s share of the joint
venture losses in the year, as the opening investment asset was £nil.
Trendy & Superdry Holding Limited operates in China through its wholly owned subsidiaries, Tianjin Trendy SuperGroup
Clothing Sales Co. Ltd and Tianjin Trendy SuperGroup Commercial Co. Ltd, who act as clothing retailers and
wholesale distributors.
During the prior year, the Board and the Executive Committee reviewed the long-term business plan for the Trendy & Superdry
Holding Limited joint venture. Following discussions with the joint venture partner and considering the challenging retail
environment due to Covid-19, both parties agreed to end the relationship. As such, the wholly owned subsidiaries have ceased
trading and the entities are currently in the process of being liquidated. A portion of the exit fee accrual has been released in
the current year (£0.4m), representing the latest estimated view of exit fees.
The below table outlines the closing net assets in relation to the joint ventures held:
Opening net assets
Investment in the period
Impairment of investment
Closing net assets
Long-term loan to joint venture
Group
2021
£m
–
–
–
–
2020
£m
–
–
–
–
Company
2021
£m
2020s
£m
–
–
–
–
–
–
–
–
The loans advanced by Superdry plc to the trading subsidiaries of Trendy & Superdry Holding Limited have a term of three
years and interest accrues at 5% per annum.
Opening loan balance
Closing loan balance
Group
2021
£m
–
–
2020
£m
–
–
Company
2021
£m
–
–
2020
£m
–
–
The loan balances were impaired in 2019 under IFRS 9 to reflect the uncertainty of the timeline for repayment of the joint
venture loans. This loan was deemed to be credit impaired and was therefore categorised as level 3 in the impairment model.
The loans remain fully impaired at the reporting date.
177
Superdry plc Annual Report 2021
177
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
21. Balances and transactions with related parties
Directors’ emoluments
Directors’ remuneration is set out in the audited section of the Directors’ Remuneration Report on pages 104 to 123.
Transactions with Directors
Other than in respect of arrangements set out below and in relation to the employment of Directors, details of which are
provided in the Directors’ Remuneration Report on pages 104 to 123, there is no material indebtedness owed to or by the
Company or the Group to any employee or any other person or entity considered to be a related party.
During the reporting period, the Group has spent £0.1m (2020: £0.1m) on travel and subsistence through companies in which
Julian Dunkerton has a personal investment. The balance outstanding at 24 April 2021 was £nil (2020: £nil). This expenditure
includes the provision of corporate travel, hotel and catering services supplied on an arm’s-length basis. These interests have
been disclosed and authorised by the Board.
In addition, the Group occupies two properties owned by J M Dunkerton SIPP pension fund whose beneficiary and member
trustee is Julian Dunkerton. The properties are rented to the Group at a rate that is not on an arm’s-length basis. Rental
charges for these properties during the year were £0.1m (2020: £0.1m). The balance outstanding at 24 April 2021 was
£nil (2020: £nil).
Company transactions with subsidiaries
The Company has made management charges and has intercompany receivable balances included within trade and other
receivables as follows:
Management charges
Intercompany payables
Intercompany receivables
C-Retail Limited
DKH Retail Limited
Superdry France SARL
Superdry Germany GmbH
SuperGroup Concessions Limited
SuperGroup Internet Limited
SuperGroup Retail Ireland Limited
SuperGroup Retail Spain S.L.U.
SuperGroup Europe BVBA
SuperGroup Netherlands BV & SuperGroup Netherlands Retail
BV
Superdry Nordic and Baltics A/S
Superdry Retail LLC
Superdry Wholesale LLC
Superdry Retail Sweden AB
Balance
sheet
24 April 2021
£m
Balance
sheet
25 April 2020
£m
Balance
sheet
24 April
2021
£m
Balance
sheet
25 April 2020
£m
(50.7)
(180.8)
2.4
0.4
(2.6)
(46.8)
–
–
1.7
6.4
–
6.0
6.4
(3.6)
(49.2)
(153.2)
2.3
0.6
(2.1)
(46.4)
–
–
–
(0.2)
–
(0.4)
(0.4)
2.6
59.3
52.2
0.6
3.1
–
43.9
0.2
1.0
3.3
6.1
0.7
2.5
29.5
–
18.8
46.7
1.4
4.7
(0.4)
22.2
0.8
0.7
2.5
1.9
1.0
–
31.9
–
2020
£m
8.2
16.6
1.1
2.6
–
8.9
0.6
0.4
0.9
0.7
–
3.1
0.5
–
2021
£m
4.6
18.0
1.1
2.1
–
16.2
0.4
0.3
0.8
0.5
–
2.8
0.5
–
The above intercompany receivable amounts are disclosed net of impairment charges.
In addition, loan interest of £0.2m (2020: £0.2m) has been charged to Superdry Retail LLC, £0.6m (2020: £0.2m) of loan
interest to Superdry Wholesale LLC and £nil (2020: £0.1m) of loan interest to Superdry Sweden AB in the period. As outlined
in notes 24 and 27, these loans are repayable on demand.
There have been no further transactions in the period.
178
Superdry plc Annual Report 2021
178
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
22. Deferred tax assets and liabilities
The movement on the Group deferred tax account is as shown below:
Depreciation
in excess of
capital
allowances
Temporary
differences*
5.7
7.8
Tax
losses
9.1
Intangible
assets –
Deferred tax
asset
Intangible
assets –
Deferred tax
liability Derivatives
Leases**
Uncertain
tax positions
8.3
(0.8)
23.2
–
Total
53.3
(0.2)
(2.5)
6.6
(0.6)
0.1
(5.8)
(1.0)
(3.4)
–
–
At 25 April 2020
Credited/(charged) to the
Group statement of
comprehensive income –
adjusted
Credited/(charged) to the
Group statement of
comprehensive income –
adjusting items
At 24 April 2021
0.5
6.0
–
5.3
1.3
17.0
–
7.7
–
(0.7)
0.8
0.8
1.3
18.7
–
(1.0)
3.9
53.8
* £3.3m of the £5.3m deferred tax asset on temporary differences arises in respect of provisions for unrealised profits on consolidation. This asset has
only been recognised in jurisdictions where the criteria for recognition of deferred tax assets referenced below have been met.
** In the table above, the “Leases” category relates to deferred tax assets arising from temporary differences on leases. The Group’s IFRS 16 right-of-use
assets and lease liabilities are not reflected in the statutory accounts of its subsidiaries, which report under applicable local GAAPs, since they arise
only on conversion of its subsidiaries’ accounts from local GAAP to IFRS. Under these applicable local GAAPs, which are used as the basis for the
profits assessed by the local tax authorities, the tax base for the Group’s leases is typically nil.
In the Group’s financial statements, the majority of IFRS 16 right-of-use assets arise in respect of store leases. In many cases
the value of these right-of-use assets has been reduced due to the recognition of impairment charges, such that the carrying
value of the lease liabilities exceeds the carrying value of the right-of-use assets, resulting in a net lease liability in the Group
financial statements.
The difference between the carrying value of this net lease liability recognised in the Group financial statements and the tax
base of the leases gives rise to a temporary difference, on which a deferred tax asset has been recognised.
All but an immaterial portion of the deferred tax asset has been recognised in respect of jurisdictions which have suffered
losses in either or both the current or prior year, primarily due to the impact of the Covid-19 pandemic.
The value of deferred tax assets recognised per jurisdiction is set out below.
Jurisdiction
UK
Germany
Other
Total
Deferred tax asset recognised
2021
£’000
40.3
9.7
3.8
53.8
2020
£’000
31.4
17.1
4.8
53.3
Deferred tax assets are recognised only in jurisdictions for which the Group has a strong track record of cumulative historical
profitability, for which financial forecasts show suitable taxable profits or future reversals of existing taxable temporary
differences and for which local legislation allows the carry forward of tax losses and deductible temporary differences either
indefinitely or over the forecast period. The forecasts are based on the Group’s medium-term financial plan, extrapolated for
a further five years using long-term growth rates that are indicative of country-specific rates.
In assessing the probability of suitable future taxable profits outside the UK the Group has taken into account the existence of
limited risk distributor contracts with certain of its European retail subsidiaries. No deferred tax asset has been recognised for
the Group’s US subsidiaries. Despite forecasting a return to profitability for Supergroup USA, the Group’s US subsidiaries do
not have a record of profitability in recent years and the US subsidiaries are exposed to a greater degree of operational and
economic risk at a company level than the Group’s European retail subsidiaries, which function as limited risk distributors.
There are unrecognised deferred tax assets of £37.0m at the balance sheet date (2020: £42.7m), of which £25.1m (2020:
£20.2m) relate to US operations and £11.4m (2020: £16.7m) relate to temporary differences on leases. Of the unrecognised
deferred tax assets attributable to US operations, £7.6m relates to losses which accrued in the periods to 29 April 2017. US
tax losses arising in periods ending prior to 31 December 2017 have an expiration period of 20 years.
179
Superdry plc Annual Report 2021
179
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
22. Deferred tax assets and liabilities continued
The movement on the Company deferred tax account is as shown below:
Net deferred tax assets £m
Company
At 25 April 2020
Credited/(charged) to the Group statement of
comprehensive income – adjusted
Credited/(charged) to the Group statement of
comprehensive income – adjusting items
At 24 April 2021
Uncertain tax position
Depreciation in
excess of
capital
allowances
Temporary
differences
1.8
0.1
(0.8)
(0.1)
–
1.0
–
–
Tax
losses
0.1
3.6
–
3.7
Intangible
assets
Derivatives
–
–
–
–
–
–
–
–
Total
2.0
2.7
–
4.7
The Group is subject to tax laws in a number of jurisdictions and given the scale of its operations, it is subject to periodic
challenges by local tax authorities on a range of tax matters. The Group’s transfer pricing policies aim to allocate profits
and losses to each operating entity on an arm’s length basis. In the past two years, the Group has experienced an already
challenging retail environment, exacerbated by the business disruption caused by the global Covid-19 pandemic.
It is uncertain how different tax authorities may view the impact of the pre-Covid challenging trading environment, and the
challenges presented by Covid on the Group’s internal transfer pricing policies.
Given this uncertainty, the Group has recognised the following provisions in respect of uncertain tax positions as required
under IAS 12, with due consideration to guidance contained within IFRIC 23.
52 weeks ended 24 April 2021
Deferred tax liability
Deferred tax asset
Uncertain tax position – net deferred tax liability
Uncertain tax position – current tax liability
Uncertain tax position – total
Group
24 April
2021
£m
25 April
2020
£m
3.0
(2.0)
1.0
0.3
1.3
–
–
–
–
–
180
Superdry plc Annual Report 2021
180
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
23. Inventories
Finished goods
Net inventories
Inventory write-downs for each period are as follows:
At start of period
Provision charge in the period
Unused amounts reversed
Utilised in period
At end of period
Group
Company
2021
£m
148.3
148.3
2020
£m
158.7
158.7
2021
£m
1.5
1.5
Group
Company
2021
£m
9.8
6.1
(3.8)
(3.0)
9.1
2020
£m
4.8
7.7
–
(2.7)
9.8
2021
£m
0.2
–
–
(0.2)
–
2020
£m
2.3
2.3
2020
£m
0.1
0.1
–
–
0.2
The net movement in the inventory provision, excluding utilised amounts, is £2.3m (2020: £7.7m).
24. Trade and other receivables
Trade receivables
Less: allowance for expected credit losses
Net trade receivables
Other amounts due from related parties
Less: loss allowance for amounts due from related parties
Net amounts due from related parties
Taxation and social security
Other receivables
Prepayments
Rent deposits held by landlords
Total trade and other receivables
Group
2021
£m
62.2
(8.6)
53.6
–
–
–
9.1
20.9
8.5
10.2
102.3
2020
£m
75.8
(14.6)
61.2
–
–
–
–
20.0
3.1
7.3
91.6
Company
2021
£m
–
–
–
227.3
(25.2)
202.1
1.6
1.2
5.4
–
2020
£m
–
–
–
278.6
(26.5)
252.1
–
1.0
4.8
–
210.3
257.9
Prepayments for the Group include £nil (2020: £nil) of prepaid rent and rates.
The fair values of trade and other receivables are equal to their carrying value. The balances due from related parties are
repayable on demand.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
Trade and other receivables are provided as security for the Asset Backed Lending facility which is described further
in note 26.
Impairment of trade receivables – Group accounts
The table below shows the credit risk exposure on the Group’s trade receivables at 24 April 2021:
Expected loss rate %
Gross carrying amount – trade receivables
Loss allowance
Carrying
amount
£m
13.7%
62.2
(8.6)
Current
£m
0.5%
43.2
(0.2)
Overdue
1-30 days
Overdue
31-60 days
Overdue
60 days +
20.1%
7.8
(1.6)
25.8%
3.4
(0.9)
76.1%
7.8
(5.9)
181
Superdry plc Annual Report 2021
181
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
24. Trade and other receivables continued
The table below shows the credit risk exposure on the Group’s trade receivables at 25 April 2020:
Expected loss rate %
Gross carrying amount – trade receivables
Loss allowance
Carrying
amount
£m
19.3%
75.8
(14.6)
Current
£m
5.6%
36.6
(2.0)
Overdue
1-30 days
Overdue
31-60 days
Overdue
60 days +
6.2%
15.8
(1.0)
9.0%
8.4
(0.8)
71.8%
15.0
(10.8)
Other receivables are tested for impairment on an individual basis. The credit risk is low, and the loss allowance measured as
12-month expected credit loss is immaterial. Due to the nature of the other classes within trade and other receivables there is
not expected to be any credit loss allowance and as such there is no expected credit loss allowance to recognise on those assets.
The closing loss allowances for trade receivables as at 24 April 2021 reconciles to the opening loss allowances as follows:
At start of period
Change in allowance, net of recoveries charged to the Group statement of comprehensive income
Receivables written off during the year as uncollectable, previously provided for
Unused loss allowance reversed
At end of period
2021
£m
14.6
–
(2.2)
(3.8)
8.6
2020
£m
5.4
15.3
(6.1)
–
14.6
The changes in the loss allowance for trade receivables has resulted in a net provision movement for the year of £6.0m
(2020: £9.2m net impairment loss) as the provision associated with the debt written off has been utilised (£2.2m, 2020: £6.1m).
The individually impaired receivables relate wholly to the Wholesale segment except for the China joint venture impairment of
receivables which is attributable to central costs. The other classes within trade and other receivables for the Group do not
contain impaired assets.
Impairment of intercompany receivables – Company accounts
On 24 April 2021 net intercompany receivables of £99.4m are included in stage 3 of IFRS 9’s general impairment model.
The Company uses the expected forward looking credit loss model approach of IFRS 9. At the start of the year, the provision
recognised against the intercompany receivables was £26.5m. During 2021, there has been a release of £1.3m of the
impairment of amounts due from related parties bringing the year-end balance within intercompany receivables that are
classified as stage 3 to £25.2m. All other intercompany receivable amounts are classified as stage 1, and as such no
material expected credit loss has been recognised on these.
The table below shows the credit risk exposure on the Company’s receivables:
Expected loss rate %
Gross carrying amount – receivables
Loss allowance
2021
Carrying
amount
£m
11.1%
227.3
(25.2)
2020
Carrying
amount
£m
9.8%
269.1
(26.5)
The decrease in the rate of expected credit losses has mainly been impacted due to releases in the provision for C-Retail
Limited and Supergroup Internet Limited of £5.1m and £0.7m respectively. This is offset by increases in the provisions for
Superdry Germany of £0.6m, Superdry France of £1.4m, Superdry Ireland of £1m and the US entities of £1.4m. The closing
loss allowances for intercompany receivables as at 24 April 2021 reconcile to the opening loss allowances as follows:
At start of period
Change in allowance, net of recoveries charged to the Group statement of comprehensive income
At end of period
2021
£m
26.5
(1.3)
25.2
2020
£m
44.2
(17.7)
26.5
182
Superdry plc Annual Report 2021
182
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
25. Cash and bank balances
Cash at bank and in hand
Total cash and cash balances
Group
Company
2021
£m
38.9
38.9
2020
£m
307.4
307.4
2021
£m
0.9
0.9
2020
£m
3.2
3.2
Cash and bank balances comprise cash at bank with major UK and European clearing banks and earn floating rates of interest
based upon bank base rates. At 24 April 2021, the Group had £22.4m (2020: £285.3m) deposited with HSBC Bank plc, £0.7m
(2020: £1.9m) deposited with Barclays Bank plc, £2.0m (2020: £1.6m) deposited with Santander UK plc, £5.7m (2020: £10.1m)
deposited with BNP Paribas, £0.7m (2020: £1.7m) deposited with ING Bank, £0.2m (2020: £0.3m) deposited with Sydbank and
£nil (2020: £0.6m) deposited with Banque Populaire Alsace Lorraine Champagne. The remainder of the cash is deposited in
other bank accounts.
The Moody’s credit rating as at 24 April 2021 for HSBC Bank plc is Aa3 (2020: Aa3), Barclays Bank plc is A1 (2020: A1),
Santander UK plc is A2 (2020: A2), BNP Paribas is Aa3 (2020: Aa3), ING Bank is Aa3 (2020: Aa3), Sydbank is A1 (2020: A1)
and Banque Populaire Alsace Lorraine Champagne is A1 (2020: A1).
Included with cash and bank balances is £0.1m (2020: £0.2m) of rent deposits held for sub-tenants of the Regent Street store,
and £1.1m (2020: £1.5m) of cash deposits from franchise customer guarantees, all of which is held in escrow. Additionally, there
is EUR 1.8m (2020: EUR 1.9m) deposited with Europäisch-Iranische Handelsbank AG which is subject to restrictions on
repatriation. These amounts are restricted cash.
26. Borrowings
Unsecured borrowings
RCF
Bank overdraft
Total unsecured borrowings
Secured borrowings
ABL facility
Total secured borrowings
Total borrowings
Group
2021
£m
–
–
–
–
–
–
2020*
£m
–
270.7
270.7
–
–
270.7
Company
2021
£m
–
–
–
–
–
–
2020
£m
–
60.1
60.1
–
–
60.1
The Group has up to a net £10m uncommitted overdraft facility which has no financial covenants and is included within the
cash pooling arrangements.
On 7 August 2020, the Group entered a new financing facility with existing lenders HSBC and BNPP in the form of a new
Asset Backed Lending facility (ABL facility) which is for up to £70m, with a term until January 2023. The ABL facility
can be extended by up to one year, at the request of the Group and the agreement of the lenders. The borrowing base will vary
throughout the year dependent on the level of the Company’s eligible inventory and receivables. As at year end, £70m was
reported to HSBC as being available to borrow based on eligible inventory and receivables in April 2021. The ABL facility with
HSBC and BNPP remained undrawn through the period to 24 April 2021.
The ABL facility has two financial covenants: an EBITDAR (earnings before interest, tax, depreciation, amortisation and rent)
covenant which is calculated on an internal budget basis; and a fixed charge cover covenant, this being the ratio of EBITDA
plus consolidated rent payable to consolidated net interest payable and consolidated net rent payable. These covenants are
calculated on frozen UK GAAP accounting standards basis, and exclude the impact of IFRS 16, IFRS 15 and IFRS 9. Both
covenants are measured over a 12-month period and are tested quarterly.
The ABL facility also has operational covenants: a debt turns, a dilution percentage with regards to notified debt and an
inventory turn. These covenants are calculated monthly when preparing the eligible inventory and receivables borrowing base.
Also, if at any time headroom is less than £10m for a period of five consecutive days or a termination event is continuing, each
Company will grant a fixed charge to the security agent. Covenant resets were agreed with the lenders in both January and July
2021 as the macroeconomic impact of social distancing and lockdown restrictions continued to extend past initial expectations.
The ABL facility replaced the previously held revolving credit facility (RCF) which had been due to expire in January 2022.
The 2020 bank overdraft balance represents individual overdrawn balances within the Group’s cash-pooling arrangements.
These had been disclosed gross in line with the requirements of IAS 32: Financial instruments: Presentation. There are no such
overdraft balances in 2021.
Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
183
Superdry plc Annual Report 2021
183
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
27. Trade and other payables
Non-current
Deferred cash contributions and rent-free periods
Other payables
Total non-current trade and other payables
Current
Trade payables
Amounts due to related parties
Taxation and social security
Other payables
Returns liability
Contract liabilities
Accruals
Total current trade and other payables
Total trade and other payables
Group
2021
£m
–
1.2
1.2
65.2
–
4.4
8.1
12.0
5.1
31.7
126.5
127.7
2020*
£m
0.4
1.8
2.2
50.3
–
2.6
1.9
13.3
5.4
29.8
103.3
105.5
Company
2021
£m
2020
£m
–
–
–
2.3
261.8
1.1
0.9
–
–
8.4
274.5
274.5
–
–
–
1.9
246.0
1.4
0.3
–
–
10.6
260.2
260.2
* The prior year deferred income balance of £18.7m has been represented as two separate categories in the current year, being returns liability and
contract liabilities.
Other payables include wage liabilities of £6.0m (2020: £0.4m) and agents’ commission accruals of £2.6m (2020: £0.2m).
The balances due to related parties are repayable on demand.
The returns liability is the present obligations for the actual and estimated customer returns and is expected to be utilised
within 12 months. The liability is recalculated at each balance sheet date considering recent sales and anticipated levels
of returns.
The maturity analysis of non-current deferred cash contributions and rent-free periods is as follows:
1 – 2 years
2 – 5 years
Greater than 5 years
Non-current deferred cash contributions and rent-free periods
Contract liabilities
Group
2021
£m
–
–
–
–
2020
£m
0.1
0.3
–
0.4
Company
2021
£m
2020
£m
–
–
–
–
–
–
–
–
Contract liabilities for the purpose of IFRS 15 relate to the provision of gift cards and the timing of the sale of goods. This is
the case where payment is received in advance of the performance obligations, which will be discharged at a later point in time.
IFRS 15 therefore requires disclosure of the value of these outstanding liabilities at year-end, and the value recognised during
the year for those performance obligations being met. The below amounts are included within trade and other payables:
Opening balance
New liabilities
Released to the income statement
Closing balance
Group
2021
£m
5.4
5.3
(5.6)
5.1
2020
£m
7.7
9.1
(11.4)
5.4
Substantially all the revenue deferred at the current financial year-end will be recognised within two financial years. The prior
year table has been represented, following the separation of deferred income into two separate categories in the current year,
being returns liability and contract liabilities.
184
Superdry plc Annual Report 2021
184
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
28. Provision for other liabilities and charges
Provisions for other liabilities and charges at the start
of the period
New provisions
Adjustment on adoption of IFRS 16
Exchange differences
Utilisation in the period
Releases on exited stores
Charge/(release) in the period
Provisions for other liabilities and charges at the
end of the period
Analysed as:
Current provisions
Non-current provisions
Onerous
property
related
contracts
2021
£m
12.4
–
–
(0.7)
(4.2)
(0.5)
5.1
Other
provisions
2021
£m
2.6
1.6
–
–
(0.1)
–
–
Group
Total
2021
£m
15.0
1.6
–
(0.7)
(4.3)
(0.5)
5.1
Onerous
property
related
contracts
2020
£m
Other
provisions
2020
£m
78.5
–
(48.4)
0.8
(6.5)
–
(12.0)
1.2
1.4
–
–
–
–
–
Total
2020
£m
79.7
1.4
(48.4)
0.8
(6.5)
–
(12.0)
12.1
4.1
16.2
12.4
2.6
15.0
4.6
7.5
1.6
2.5
6.2
10.0
4.2
8.2
–
2.6
4.2
10.8
Note 2 outlines the nature, descriptions and sensitivities surrounding the onerous property related contract provisions.
The other provisions category relates to the dilapidation provisions and additions in the year relate to the furlough provision.
Dilapidations provisions will be utilised upon the exit or expiry of various property leases which are expected to be between
2021 and 2031. Onerous property related contracts are utilised over the remaining life of the lease, expected to be between
2021 and 2029. The furlough provision is to cover any furlough related clawbacks and is expected to be utilised in the next
financial year. It is included within “Other Provisions” in the table above.
Provisions for other liabilities and charges at the start of the period
Adjustment on adoption of IFRS 16
Utilisation in the period
Charge/(release) in the period
Provisions for other liabilities and charges at the end of the period
Analysed as:
Current provisions
Non-current provisions
Company
Onerous
property
related
contracts
Onerous
property
related
contracts
2021
£m
0.3
–
–
0.3
0.6
0.3
0.3
2020
£m
2.8
(2.1)
(0.3)
(0.1)
0.3
0.1
0.2
185
Superdry plc Annual Report 2021
185
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
29. Contingencies and commitments
Capital expenditure commitments
Property, plant and equipment
Contingent liabilities
Group
Company
2021
£m
–
2020
£m
–
2021
£m
–
2020
£m
–
The Company is party to an unlimited cross guarantee over all liabilities of the Group. The value of this amount is deemed not
practical to disclose.
The Group has contractual agreements with third party wholesale agents which include a right for the wholesale agent to
be indemnified when the contract is terminated. These future indemnity amounts are held as contingent liabilities until the
contract is terminated, at which point they are held as provisions or accruals. The value of future obligations for contracts
which have not yet been terminated (and have no defined end date) is £3.4m.
30. Leases
Right-of-use asset
52 weeks ended 24 April 2021
Cost
At 25 April 2020
Additions
Disposals
Lease modifications
Exchange rate difference
At 24 April 2021
Accumulated depreciation
At 25 April 2020
Depreciation charge
Disposals
Net impairment charges and reversals
Exchange rate difference
At 24 April 2021
Net balance sheet amount at 24 April 2021
Group
Company
Right-of-use
asset
£m
Right-of-use
asset
£m
344.2
17.0
(7.7)
(7.6)
(2.5)
343.4
6.7
0.5
–
–
–
7.2
Group
Company
Right-of-use
asset
£m
Right-of-use
asset
£m
226.2
27.3
(7.5)
7.4
(1.1)
252.3
91.1
1.2
0.7
–
3.5
–
5.4
1.8
The above right-of-use asset net impairment movement of £7.4m constitutes part of the total net impairment of £10.7m in 2021
(2020: £136.8m) and relates to an impairment review performed on store assets with the remaining £3.3m relating to property,
plant and equipment. For further details on this please see notes 2 and 6. This impairment has been included within adjusting
items in the year.
The carrying amount of the right-of-use asset is split between motor vehicles of £0.2m (2020: £0.4m) and property of £89.9m
(2020: £117.6m).
186
Superdry plc Annual Report 2021
186
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
30. Leases continued
52 weeks ended 25 April 2020
Cost
At 28 April 2019
Recognition of cost of transition
Additions
Disposals
Lease modifications
Exchange rate difference
At 25 April 2020
Accumulated depreciation
At 28 April 2019
Recognition of impairment at transition
Depreciation charge
Disposals
Net impairment charges and reversals
At 25 April 2020
Net balance sheet amount on 25 April 2020
Items in the Group statement of comprehensive income not impacted by IFRS 16 are:
Lease expense relating to short-term assets
The expense of variable lease payments not included in the lease liabilities
Group
Company
Right-of-use
asset
£m
Right-of-use
asset
£m
–
335.7
7.7
(2.0)
(0.6)
3.4
344.2
–
6.3
–
–
0.3
0.1
6.7
Group
Company
Right-of-use
asset
£m
Right-of-use
asset
£m
–
48.4
55.0
–
122.8
226.2
118.0
Group
2021
£m
4.3
1.3
–
–
1.2
–
–
1.2
5.5
2020
£m
5.1
3.8
The above lease expenses are gross of onerous property related contracts provision, capital contribution releases and rent-free
releases. The equivalent disclosures in note 5 and note 12 are disclosed net of these.
187
Superdry plc Annual Report 2021
187
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
30. Leases continued
Lease liability
Lease liabilities are calculated by discounting fixed lease payments using the incremental borrowing rate at the lease inception
date determined with reference to the geographical location and length of the lease. The discount rates applied to leases range
between 0.3% and 8.5% (2020: 0.1% to 8.5%).
Analysed as:
Current lease liability
Non-current lease liability
Total lease liability
Group
2021
£m
94.1
175.5
269.6
2020
£m
80.1
240.8
320.9
Company
2021
£m
2.1
3.6
5.7
The remaining contractual maturities of the lease liabilities, which are gross and undiscounted, are as follows:
Group
Company
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
More than five years
2021
£m
94.1
54.3
43.8
36.7
25.5
24.4
2020
£m
84.4
65.2
55.7
45.1
37.8
51.8
Total undiscounted lease liability
278.8
340.0
Reconciliation of liabilities to cash flow arising from financing activities:
2021
£m
1.5
1.2
0.9
0.9
0.5
0.3
5.3
Opening lease liability
Recognition of lease liability on transition
Payment of lease liability
Present value of Covid-19 rent concessions and deferrals
Increase due to lease additions and modifications
Decrease due to lease disposals and modifications
Interest expense
Foreign exchange differences
Closing lease liability
Group
Company
2021
£m
320.9
–
(45.4)
(4.2)
18.0
(21.3)
5.5
(3.9)
269.6
2020
£m
–
372.1
(66.8)
–
7.8
(2.3)
5.7
4.4
320.9
2021
£m
8.1
–
(0.8)
(0.2)
0.1
(1.7)
0.2
–
5.7
2020
£m
1.8
6.3
8.1
2020
£m
2.3
1.9
1.6
1.2
0.8
0.8
8.6
2020
£m
–
8.8
(1.4)
–
0.4
–
0.2
0.1
8.1
All movements in the table above are non-cash movements except for payment of lease liability and interest expense which are
cash movements.
188
Superdry plc Annual Report 2021
188
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
31. Property commitments
The future aggregate minimum lease payments under non-cancellable commitments are as follows:
Due within 1 year
Due in more than 1 year, but no more than 5 years
Due in more than 5 years
Total operating lease commitments
Land and buildings
Group
Company
2021
£m
15.8
35.2
5.1
56.1
2020
£m
13.3
31.3
5.6
50.2
2021
£m
0.7
1.8
0.2
2.7
2020
£m
0.7
2.0
0.4
3.1
The Group leases various stores, offices and vehicles under non-cancellable operating leases. The leases have varying terms,
escalating clauses and renewal rights. On renewal, the terms of the leases are renegotiated. From 28 April 2019, the Group has
recognised right-of-use assets for these leases, except for short-term and low-value leases. Following the transition to IFRS 16,
rent is recorded as a right-of-use asset, so the above disclosure relates to service charges only.
Not included in the above commitments are contingent rental payments which are linked to sales generated from stores.
For individual stores, up to 100% of lease payments are based on variable contracts with various percentages within the terms.
32. Note to the cash flow statement
Reconciliation of operating profit to cash generated from operations
Operating (loss)/profit
Adjusted for:
• Loss/(gain) on derivatives
• Depreciation of property, plant and equipment and
right-of-use assets
• Amortisation of intangible assets
• Impairment of property, plant and equipment, right-of-use assets
and intangible assets
• Loss on disposal of property, plant and equipment
• Lease modifications
• IFRS 16 Covid-19 rent concessions
• Increase/(decrease) in onerous property related
contracts provision (net of releases on exited stores)
• Increase/(decrease) in other provisions
• Release of lease incentives
• Employee share award schemes
• IFRS 2 charge – FSP
• Foreign exchange losses
• Write down of inventory
• Net impairment (credit)/loss of trade receivables
Operating cash flow before movements in working capital
Changes in working capital:
• Decrease/(increase) in inventories
• (Increase)/decrease in trade and other receivables
• Increase/(decrease) in trade and other payables and provisions
Cash generated from/(used in) operating activities
Group cash flows arising from adjusting items are £1.4m (2020: £nil).
Note
Group
2021
£m
2020
£m
(29.5)
(159.4)
6
4.7
(1.9)
18,30
19
30
28
28
8
9
23
24
42.4
11.0
12.8
0.1
(14.3)
(4.0)
4.6
1.6
(0.3)
1.1
0.5
0.5
2.3
(3.8)
29.7
6.2
(10.8)
25.0
50.1
78.5
8.7
139.1
0.3
–
–
(12.0)
–
(0.1)
0.9
0.3
(1.9)
7.7
15.3
75.5
21.6
14.6
(24.2)
87.5
Company
2021
£m
(6.0)
–
2.2
7.1
5.2
0.7
(1.6)
(0.6)
0.1
–
–
0.4
0.1
(0.6)
–
–
7.0
0.8
48.8
14.8
71.4
2020
£m
2.5
–
5.3
5.5
0.8
0.3
–
–
(0.1)
–
–
0.6
(0.3)
0.1
0.1
–
14.8
(0.3)
(55.8)
10.6
(30.7)
189
Superdry plc Annual Report 2021
189
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
33. Net cash/(debt)
Analysis of net cash/(debt)
Cash and bank balances
Overdraft
Net cash/(debt)
Cash and bank balances
Overdraft
Net cash/(debt)
Group
2020
£m
Cash flow
£m
307.4
(270.7)
36.7
(278.7)
270.7
(8.0)
Non-cash
changes
£m
10.2
–
10.2
Company
Cash flow
£m
Non-cash
changes
£m
(2.9)
60.1
57.2
0.6
–
0.6
2020
£m
3.2
(60.1)
(56.9)
2021
£m
38.9
–
38.9
2021
£m
0.9
–
0.9
Non-cash changes relate to exchange gains on cash and cash equivalents. Interest of £nil (2020: £0.2m) has been incurred in
respect of short-term facilities.
The position outlined above is not inclusive of financing liabilities in relation to IFRS 16. Financing liabilities comprise overdrafts
and lease liabilities, and the reconciliation from opening to closing financing liabilities is disclosed in the table above for
overdrafts, and in note 30 for lease liabilities.
See note 36 for an explanation of the use of net cash/debt.
34. Financial risk management
The Company’s and Group’s activities expose it to a variety
of financial risks, including market risk (including foreign
currency risk and cash flow interest rate risk), credit risk
and liquidity risk. The Group’s overall risk management
programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects
on the Group’s financial performance. The Group uses
derivative financial instruments to hedge certain foreign
exchange exposures.
Credit risk – Group accounts
Credit risk is managed on a Group basis through a shared
service centre based in Cheltenham. Credit risk arises from
cash and cash equivalents, as well as credit exposures to
Wholesale and to a lesser extent Store and Ecommerce
customers, including outstanding receivables and committed
transactions. For Wholesale customers, management
assesses the credit quality of the customer, considering its
financial position, past experience and other factors. The
Group mitigates risk in certain markets or with customers
considered higher risk with payments in advance and bank
guarantees, as well as adopting credit insurance where
appropriate. The Group regularly monitors its exposure to
bad debts in order to minimise risk of associated losses.
The Group is party to banking agreements that include a
legal right of offset which enables the overdraft balances
to be settled net with cash balances (2021 overdrafts: £nil,
2020 overdrafts: £270.7m). These balances have been
excluded from contractual cash flows.
Sales to Store and Ecommerce customers are settled
in cash, by major credit cards, or other online payment
providers. Credit risk from cash and cash equivalents is
managed via banking with well-established banks with a
strong credit rating.
Impairment of financial assets
From 25 April 2018, the Group applied the IFRS 9 simplified
approach in measuring expected credit losses (ECL). The
Group’s financial assets subject to the ECL model are
primarily trade receivables.
A loss allowance is recognised based on ECL. The amount of
ECL is updated at each reporting date to reflect changes in
credit risk since initial recognition.
The expected credit losses on these financial assets are
estimated using a provision matrix based on the Group’s
historical credit loss experience, adjusted for factors that
are specific to the debtors, general economic conditions and
an assessment of both the current as well as the forecast
direction of conditions at the reporting date. None of the
trade receivables that have been written off are subject to
enforcement activities.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument
has increased significantly since initial recognition, the
Group compares the risk of a default occurring on the
financial instrument at the reporting date with the risk of a
default occurring on the financial instrument at the date of
initial recognition. In making this assessment, the Group
considers both quantitative and qualitative information
that is reasonable and supportable, including historical
experience and forward-looking information that is available
without undue cost or effort. Forward-looking information
considered includes the prospects of the industries in which
the Group’s debtors operate, obtained from economic expert
reports, financial analysts, governmental bodies, relevant
think-tanks and other similar organisations, as well as
consideration of various external sources of actual and
forecast economic information that relate to the Group’s
core operations.
190
Superdry plc Annual Report 2021
190
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
34. Financial risk management continued
In particular, the following information is considered when
assessing whether credit risk has increased significantly
since initial recognition:
• an actual or expected significant deterioration in the
financial instrument’s external (if available) or internal
credit rating;
• significant deterioration in external market indicators
of credit risk for a particular financial instrument, e.g., a
significant increase in the credit spread, the credit default
swap prices for the debtor, or the length of time or the
extent to which the fair value of a financial asset has
been less than its amortised cost;
The ECL is estimated as the difference between all
contractual cash flows that are due to the Group in
accordance with the contract and all the cash flows that
the Group expects to receive. The Group recognises an
impairment gain or loss in profit for all financial instruments
with a corresponding adjustment to their carrying amount
through a loss account.
Credit risk – Company accounts
The ECL model is required to be applied to the intercompany
receivable balances, which are classified as held at amortised
cost. The increase in the loss allowance during the current
year relates to a deterioration in the borrower’s credit risk
during the current period.
• existing or forecast adverse changes in business, financial
Foreign currency risk
or economic conditions that are expected to cause a
significant decrease in the debtor’s ability to meet its
debt obligations;
• an actual or expected significant deterioration in the
operating results of the debtor;
• significant increases in credit risk on other financial
instruments of the same debtor; and
• an actual or expected significant adverse change in the
regulatory, economic, or technological environment of the
debtor that results in a significant decrease in the debtor’s
ability to meet its debt obligations.
Irrespective of the outcome of the above assessment, the
Group presumes that the credit risk on a financial asset
has increased significantly since initial recognition when
contractual payments are more than 30 days past due,
unless the Group has reasonable and supportable
information that demonstrates otherwise.
Despite the foregoing, the Group assumes that the credit
risk on a financial instrument has not increased significantly
since initial recognition if the financial instrument is
determined to have low credit risk at the reporting date. A
financial instrument is determined to have low credit risk if:
1. the financial instrument has a low risk of default;
2. the debtor has a strong capacity to meet its contractual
cash flow obligations in the near term; and
3. adverse changes in economic and business conditions
in the longer term may, but will not necessarily, reduce
the ability of the borrower to fulfil its contractual cash
flow obligations.
The maximum exposure to credit risk is equal to the carrying
value of the derivatives, cash and trade and other receivables.
Measurement and recognition of expected credit losses
The measurement of ECL is a function of the probability
of default, loss given default and the exposure at default.
The assessment of the probability of default and loss given
default is based on historical data adjusted by forward-
looking information. The exposure at default is represented
by the asset’s gross carrying value, less specific insurance
held, at the reporting date.
The Group’s foreign currency exposure arises from:
• transactions (sales/purchases) denominated in
foreign currencies.
• monetary items (mainly cash receivables and borrowings)
denominated in foreign currencies.
• investments in foreign operations, whose net assets are
exposed to foreign currency translation.
The Group is mainly exposed to US Dollar and Euro currency
risks. The exposure to foreign exchange risk within each
company is monitored and managed at Group level. The
Group’s policy on foreign currency risk is to economic hedge
a portion of foreign exchange risk associated with forecast
overseas transactions, and transactions and monetary
items denominated in foreign currencies.
The Group’s approach is to hedge the risk of changes in
the relevant spot exchange rate. The Group uses forward
contracts to hedge foreign exchange risk. As at 24 April 2021
and 25 April 2020, the Group had entered a number of
foreign exchange forward contracts to hedge part of the
aforementioned translation risk. Any remaining amount
remains unhedged.
Forward exchange contracts have not been formally
designated as hedges and consequently no hedge
accounting has been applied. Forward exchange contracts
are carried at fair value. Currency exposure arising from the
net assets of the Group’s foreign operations are not hedged.
On 24 April 2021, if the currency had weakened/
strengthened by 10% against both the US Dollar and Euro
with all other variables held constant, profit for the period
would have been £13.8m (2020: £29.9m) higher/lower,
mainly as a result of foreign exchange gains/losses on
translation of US Dollar/Euro trade receivables, cash and
cash equivalents, and trade payables. The figure of 10%
used for sensitivity analysis has been chosen because it
represents a range of reasonably probable fluctuations in
exchange rates.
191
Superdry plc Annual Report 2021
191
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
34. Financial risk management continued
The Group’s foreign currency exposure is as follows:
Financial assets
Trade receivables
Cash and cash equivalents
Financial assets exposure
Financial liabilities
Trade payables
Lease liabilities
Overdrafts
Financial liabilities exposure
Net exposure
Cash flow interest rate risk
2021
US Dollar
£m
2.5
3.5
6.0
(8.3)
(29.7)
–
(38.0)
(32.0)
Group
2021
Euro
£m
2020
US Dollar
£m
40.5
20.1
60.6
(11.1)
(116.3)
–
(127.4)
(66.8)
1.4
21.6
23.0
(11.2)
(47.2)
(86.4)
(144.8)
(121.8)
2020
Euro
£m
46.4
74.7
121.1
(11.8)
(159.0)
(127.0)
(297.8)
(176.7)
The Group has financial assets and liabilities which are exposed to changes in market interest rates. Changes in interest rates
impact primarily on deposits, loans and borrowings by changing their future cash flows (variable rate). Management does not
currently have a formal policy of determining how much of the Group’s exposure should be at fixed or variable rates and the
Group does not use hedging instruments to minimise its exposure. However, at the time of taking out new loans or borrowings,
management uses its judgement to determine whether it believes that a fixed or variable rate would be more favourable for
the Group over the expected period until maturity. Sensitivity analysis has not been provided due to the low level of loans and
borrowings within the Group. The Group’s significant interest-bearing assets and liabilities are disclosed in notes 25 and 26.
Liquidity risk
Cash flow forecasting is performed on a Group basis by the monitoring of rolling forecasts of the Group’s liquidity requirements
to ensure that it has sufficient cash to meet operational needs. The maturity profile of the Group’s liabilities is analysed in notes
26, 27 and 30.
The Group is party to banking agreements that include a legal right of offset which enables the overdraft balances to be settled
net with cash balances (2021: £nil overdraft, 2020: £270.7m overdraft). These balances have been excluded from contractual
cash flows.
Following Covid-19, the Group is closely managing cash flows through reduced capital expenditure, tight control over day-to-
day spend and working collaboratively with suppliers. Government support has been utilised where available, including furlough
schemes, with additional details found in note 37. There is additionally a focus on improving operational efficiency through
reducing stock levels, and on overall liquidity.
During the year the Group entered a new financing facility with existing lenders, HSBC and BNPP in the form of a new Asset
Backed Lending facility (ABL facility) which is for up to £70m, with a term until January 2023. The ABL facility can be extended
by up to one year, at the request of the Group and the agreement of the lenders. Further information can be found in note 26.
192
Superdry plc Annual Report 2021
192
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
34. Financial risk management continued
Maturity of undiscounted financial liabilities (excluding derivatives)
The expected maturity of undiscounted financial liabilities is as follows:
In one year or less
In two to five years
2021
£m
105.0
1.2
2020
£m
352.7
1.8
The above balances relate to trade payables, other payables, accruals and overdrafts. See note 30 for analysis of undiscounted
lease liabilities.
Valuation hierarchy
The table below shows the financial instruments carried at fair value by valuation method:
Assets
Derivative financial instruments
• forward foreign exchange contracts
Liabilities
Derivative financial instruments
• forward foreign exchange contracts
Level 1
£m
Level 2
£m
Group
2021
Level 3
£m
Level 1
£m
Level 2
£m
2020
Level 3
£m
–
–
2.7
(7.2)
–
–
–
–
2.6
(2.3)
–
–
The level 2 forward foreign exchange valuations are derived from mark-to-market valuations based on observable market data
as at the close of business on 24 April 2021.
The notional principal amount of the outstanding outright FX contracts as at 24 April 2021 was £103.0m (2020: £245.2m).
There are no structured forward foreign exchange contracts in place as at 24 April 2021 (2020: structured forward foreign
exchange contracts in place to sell up to EUR 96m (£87.4m)).
Derivative financial instruments
There is a master netting agreement in place in relation to derivatives. All cash flows will occur within 24 months. All derivative
financial instruments are carried at fair value as assets when the fair value is positive and as liabilities when the fair value
is negative.
The table below analyses the Group’s and Company’s derivative financial instruments. The amounts disclosed in the table are
the carrying balances of the assets and liabilities as at the balance sheet date.
Forward foreign exchange contracts – current
Forward foreign exchange contracts – non-current
Total derivative financial assets
Forward foreign exchange contracts – current
Forward foreign exchange contracts – non-current
Total derivative financial liabilities
All financial derivative instruments are due within 24 months.
Group
2021
£m
2.4
0.3
2.7
5.7
1.5
7.2
2020
£m
2.5
0.1
2.6
2.1
0.2
2.3
Company
2021
£m
2020
£m
–
–
–
–
–
–
–
–
–
–
–
–
The full fair value of a derivative is classified as a non-current asset or liability where the remaining maturity of the derivative is
more than 12 months and as a current asset or liability if the maturity of the derivative is less than 12 months.
193
Superdry plc Annual Report 2021
193
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
34. Financial risk management continued
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide
returns for shareholders, and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost
of capital. The Group is not subject to any externally imposed capital requirements. The Group’s strategy remains unchanged
from financial year 2020.
Consistent with others in the industry, the Group monitors capital based on the gearing ratio. This ratio is calculated as net
debt divided by total capital employed. Net debt is defined in note 36. Total capital employed is calculated as “equity” as
shown in the consolidated balance sheet plus net debt. The Group is in a net cash position on 24 April 2021.
The Board has put in place a distribution policy which considers the degree of maintainability of the Group’s profit streams as
well as the requirement to maintain a certain level of cash resources for working capital and capital investment purposes. If
appropriate, the Board will recommend an ordinary dividend broadly reflecting the profits in the relevant period. In addition,
the Board will consider and, if appropriate, recommend the payment of a supplemental dividend alongside the final ordinary
dividend. The value of any such supplemental dividend will vary depending on the performance of the Group and the Group’s
anticipated working capital and capital investment requirements through the cycle. It is intended that, in normal circumstances,
the value of the ordinary dividends declared in respect of any year are covered at least three times by adjusted profit after tax
(see note 36 for definition). Considering the current economic climate and consistent with the FY20 decision, the Board did not
propose an interim dividend and has made the decision not to recommend a final dividend for FY21.
The capital structure is as follows:
Equity
Cash and cash equivalents
Overdraft
Net cash and cash equivalents
2020
£m
112.7
307.4
(270.7)
36.7
Company
2021
£m
2020
£m
213.2
225.4
0.9
–
0.9
3.2
(60.1)
(56.9)
Group
2021
£m
90.4
38.9
–
38.9
Group
Trade and other receivables excluding
non-financial assets
Derivative financial instruments
Cash and cash equivalents
Financial instruments – assets
–
2.7
–
2.7
Assets at fair
value through
profit or loss
2021
£m
Financial
assets at
amortised cost
2021
£m
Total
2021
£m
84.7
2.7
38.9
Assets at fair
value through
profit or loss
2020
£m
Financial
assets at
amortised cost
2020
£m
–
2.6
–
2.6
88.5
–
307.4
395.9
84.7
–
38.9
123.6
126.3
Derivative financial instruments
Lease liabilities
Overdrafts
Trade and other payables excluding
non-financial liabilities
Financial instruments – liabilities
Liabilities at
fair value
through profit
or loss
2021
£m
Other
financial
liabilities at
amortised
cost
2021
£m
7.2
–
–
–
7.2
–
269.6
–
106.2
375.8
Group
Liabilities
at fair value
through
profit or loss
2020
£m
Other financial
liabilities at
amortised cost
2020
£m
2.3
–
–
–
2.3
–
320.9
270.7
83.8
675.4
Total
2021
£m
7.2
269.6
–
106.2
383.0
194
Superdry plc Annual Report 2021
194
Total
2020
£m
88.5
2.6
307.4
398.5
Total
2020
£m
2.3
320.9
270.7
83.8
677.7
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
34. Financial risk management continued
Trade and other receivables excluding non-financial assets
Cash and cash equivalents
Financial instruments – assets
Trade and other payables excluding non-financial liabilities
Lease liabilities
Overdrafts
Financial instruments – liabilities
35. Share capital
Authorised, allotted and fully paid 5p shares
Group and Company
24 April 2021
25 April 2020
Company
Financial
assets at
amortised cost
2021
£m
Financial
assets at
amortised cost
2020
£m
203.3
0.9
204.2
243.6
3.2
246.8
Company
Other
financial
liabilities at
amortised cost
2021
£m
Other financial
liabilities at
amortised cost
2020
£m
273.4
5.7
–
279.1
Number of
shares
82,041,820
82,010,788
258.8
8.1
60.1
327.0
Value of
shares
(£m)
4.1
4.1
31,032 ordinary shares of 5p were authorised, allotted and issued in the period under the Superdry share-based Long-Term
Incentive Plans, Buy As You Earn and Save As You Earn schemes.
36. Alternative performance measures
Introduction
Adjusting items
The Directors assess the performance of the Group using a
variety of performance measures, some are IFRS, and some
are adjusted and therefore termed ‘‘non-GAAP’’ measures
or “alternative performance measures” (APMs). The
rationale for using adjusted measures is explained below.
The Directors principally discuss the Group’s results on an
adjusted basis. Results on an adjusted basis are presented
before adjusting items.
The APMs used in this Annual Report are adjusted operating
profit and margin, adjusted (loss)/profit before tax, adjusted
tax expense and adjusted effective tax rate, adjusted
earnings per share and net cash/debt.
Like-for-like (LFL) has been removed as an APM in the
current year as it is no longer considered relevant as a key
measure of performance due to the disruption caused from
Covid-19 related store closures.
A reconciliation from these non-GAAP measures to the
nearest measure prepared in accordance with IFRS is
presented below. The APMs we use may not be directly
comparable with similarly titled measures used by other
companies. There have been no changes in definitions
from the prior period.
The Group’s statement of comprehensive income and
segmental analysis separately identify adjusted results
before adjusting items. The adjusted results are not intended
to be a replacement for the IFRS results. The Directors
believe that presentation of the Group’s results in this way
provides stakeholders with additional helpful analysis of
the Group’s financial performance. This presentation is
consistent with the way that financial performance is
measured by management and reported to the Board and
the Executive Committee. It is also consistent with the way
that management is incentivised.
In determining whether events or transactions are treated as
adjusting items, management considers quantitative as well
as qualitative factors such as the frequency or predictability
of occurrence. Adjusting items are identified by virtue of
their size, nature or incidence.
195
Superdry plc Annual Report 2021
195
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
36. Alternative performance measures
continued
Examples of charges or credits meeting the above definition
and which have been presented as adjusting items in the
current and/or prior years include:
• acquisitions/disposals of significant businesses and
investments (including related to the joint venture);
• impact on deferred tax assets/liabilities for changes in
tax rates;
• business restructuring programmes;
• derecognition of deferred tax assets;
• asset impairment charges and onerous property related
contracts provision;
• the movement in the fair value of unrealised financial
derivatives; and
• IFRS 2 charges in respect of Founder Share Plan (FSP).
If other items meet the criteria, which are applied
consistently from year to year, they are also treated as
adjusting other items.
In previous reporting periods “Adjusting items” were
described as “Exceptional and other items”.
Adjusting items in this period
The following items have been included within
‘‘Adjusting items’’ for the period ended 24 April 2021:
Fair value remeasurement of foreign exchange contracts –
financial years 2021 and 2020
The fair value of unrealised financial derivatives is
reviewed at the end of each reporting period and unrealised
losses/gains are recognised in the Group statement of
comprehensive income.
The Directors consider unrealised losses/gains to be
adjusting items due to both their size and nature. The size of
the movement on the fair value of the contracts is dependent
on the spot foreign exchange rate at the balance sheet date
and an assessment of future foreign exchange volatility
applied to the relevant contract currencies, as such the size
of the movements can be substantial. The unrealised foreign
exchange contracts have been entered into in order to
achieve an economic hedge against future payments and
receipts and are not a reflection of historical performance.
Restructuring, strategic change and other costs – financial
years 2021 and 2020
Adjusting items include costs resulting from the
restructuring programme announced in the FY20 Group
Annual Report. The Directors consider these to be adjusting
due to their size and their one-off nature.
During the prior year, the Board and Executive Committee
reviewed the long-term business plan for the Trendy &
Superdry Holding Limited joint venture. Following
discussions with the joint venture partner and considering
the challenging retail environment due to Covid-19, both
parties agreed to end the relationship. Costs for the wind-up
of the business totalling £1.5m were accrued for; these are
adjusting items based on the one-off nature of this decision.
A credit of £0.4m has been recognised in the current year
for unutilised accrual amounts.
Store asset impairment and onerous property related
contracts provision – financial years 2021 and 2020
A store asset impairment and onerous property related
contracts provision review was performed during the
year across the Group’s store portfolio. An adjusting net
impairment charge of £10.7m of fixed assets, intangible
assets and right-of-use assets has been made on the basis
that the recoverable amount is less than the carrying value.
In addition, an onerous property related contracts provision
of £5.1m has been charged.
A similar exercise was performed in financial year 2020
across all store assets, resulting in a fixed asset impairment
of £136.8m and an onerous property related contracts
provision release of £12.0m.
The Directors consider the store impairment and onerous
property related contracts provision to be an adjusting item
due to the materiality of the charge. See notes 2 and 6 for
further details.
Founder Share Plan (FSP) – IFRS 2 charge – financial years
2021 and 2020
While there are no cost or cash implications for the Group,
the Founder Share Plan (FSP) falls within the scope of
IFRS 2. The Group has included the IFRS 2 charge and
related deferred tax movement in relation to the FSP within
adjusting items for the current and subsequent periods.
The Directors consider the plan to be one-off in nature
and unusual in that the share awards are being funded
exclusively by the Founders. The full-year charge for FY21
and FY22 has been estimated between £0.2m – £0.5m each
period. While the charge is spread over a few financial years,
the plan is a one-time scheme. Accordingly, the IFRS 2
charge in respect of the FSP is an adjusting item due to
the size, nature and incidence of the scheme. There are
no known recent examples within quoted companies of
incentive arrangements operating in a similar way to the
FSP. While unusual in terms of size, the plan is also unusual
regarding its treatment in what is essentially a personal
arrangement, with no net cost or cash and minimal
administrative burden to the Company. There are no other
adjustments anticipated in respect of the scheme other
than the IFRS 2 charge.
Therefore, the Directors consider the charge to be
significant in terms of its potential influence on the readers’
interpretation of the Group’s financial performance. See
note 9 for further details of the FSP.
196
Superdry plc Annual Report 2021
196
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
36. Alternative performance measures continued
Intangible asset impairments – financial year 2021
The Group has recognised impairment charges in the period for website and software intangible assets. A review was
performed during the period over website and software intangible assets which are likely to be replaced or upgraded in the
foreseeable future, leading to an impairment of £2.1m.
The Directors consider the website and software intangible asset impairment to be an adjusting item due to the one-off nature
of the review. It is the Group’s policy to present asset impairment charges as adjusting items. See notes 2 and 6 for further details.
Adjusted operating profit and margin
In the opinion of the Directors, adjusted operating profit and margin are measures which seek to reflect the performance of the
Group that will contribute to long-term sustainable profitable growth. The Directors focus on the trends in adjusted operating
profit and margins, and they are key internal management metrics in assessing the Group’s performance. As such, they
exclude the impact of adjusting items. In previous reporting periods “Adjusted operating profit and margin” was described
as “Underlying operating profit and margin”. Although the Group is currently making an operating loss, adjusted operating
profit and margin remain key metrics monitored by management given the Group’s intention to return to profitability.
A reconciliation from operating profit, the most directly comparable IFRS measure, to the adjusted operating profit and margin
is set out below.
Reported revenue
Operating loss
Adjusting items
Adjusted operating (loss)/profit
Operating margin
Adjusted operating margin
2021
£m
556.1
(29.5)
24.1
(5.4)
2021
£m
(5.3)%
(1.0)%
2020
£m
704.4
(159.4)
125.1
(34.3)
2020
£m
(22.6)%
(4.9)%
197
Superdry plc Annual Report 2021
197
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
36. Alternative performance measures continued
Adjusted (loss)/profit before tax
In the opinion of the Directors, adjusted (loss)/profit before tax is a measure which seeks to reflect the performance of the
Group that will contribute to long-term sustainable profitable growth. As such, adjusted (loss)/profit before tax excludes the
impact of adjusting items. The Directors consider this to be an important measure of Group performance and is consistent with
how the business performance is reported to and assessed by the Board and the Executive Committee.
This is a measure used within the Group’s incentive plans. Refer to the Remuneration Report on pages 104 to 123 for an
explanation of why this measure is used within incentive plans.
In previous reporting periods “Adjusted (loss)/profit before tax” was described as “Underlying (loss)/profit before tax”.
A reconciliation from loss before tax, the most directly comparable IFRS measure, to the adjusted loss before tax is set
out below.
Loss before tax
Adjusting items
Adjusted loss before tax
2021
£m
(36.7)
24.1
(12.6)
2020
£m
(166.9)
125.1
(41.8)
Adjusted tax expense and adjusted effective tax rate
In the opinion of the Directors, adjusted tax expense is the total tax charge for the Group excluding the tax impact of adjusting
items. Correspondingly, the adjusted effective tax rate is the adjusted tax expense divided by the adjusted (loss)/profit
before tax.
These measures are an indicator of the ongoing tax rate of the Group.
In previous reporting periods “Adjusted tax expense and adjusted effective tax rate” was described as “Underlying tax expense
and underlying effective tax rate”.
A reconciliation from tax expense, the most directly comparable IFRS measures, to the adjusted tax expense is set out below:
Adjusted loss before tax
Tax credit/(expense)
Adjusting items – current tax
Adjusting items – deferred tax
Adjusted tax credit/(expense)
Adjusted effective tax rate
2021
£m
(12.6)
0.6
–
(3.9)
(3.3)
2020
£m
(41.8)
23.5
(0.1)
(17.3)
6.1
26.2%
(14.6)%
198
Superdry plc Annual Report 2021
198
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
36. Alternative performance measures continued
Net cash/(debt)
In the opinion of the Directors, net cash/debt is a useful measure to monitor the overall cash position of the Group. It is the total
of all short and long-term loans and borrowings, less cash and cash equivalents. See note 33 for the Group’s net cash/(debt)
position. This position is exclusive of financial liabilities in relation to IFRS 16.
Adjusted EPS
In the opinion of the Directors, adjusted earnings per share is calculated using basic earnings, adjusted to exclude adjusting
items net of current and deferred tax. See note 16 for the Group’s adjusted EPS.
In previous reporting periods “Adjusted EPS” was described as “Underlying EPS”.
37. Government assistance
The Group received government support within the UK and EU territories during the current and prior years in response to the
Covid-19 pandemic. This included: deferring tax payments; obtaining reductions in business rates from the UK government;
seeking compensation for lost revenue and subsidies to cover fixed costs; and placing staff on furlough during the periods of
store closures.
Furlough support across all territories of £9.2m was recognised in the year (2020: £2.9m), through the UK’s Coronavirus Job
Retention Scheme (CJRS) and equivalent schemes in other countries. A provision of £1.6m has been recognised to cover any
existing furlough related clawbacks, as outlined in note 28.
The business rates reductions from the UK government totalled £15.7m (2020: £1.7m).
Lost revenue and subsidy support in the UK and other territories of £2.5m has been recognised in the year (2020: £nil).
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions
attached to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as
expenses the related costs for which the grants are intended to compensate. The value is netted off against costs in selling,
general and administrative expenses.
38. Post balance sheet events
There are no events that are material in value or nature that constitute disclosure as post balance sheet events.
199
Superdry plc Annual Report 2021
199
Superdry plc Annual Report 2021
Our Financials → Notes to the Group and Company Financial Statements to the members of Superdry plc
39. Details of related
undertakings
Superdry plc (the Company) is a
public company limited by shares
incorporated in the United Kingdom
under the Companies Act and is
registered in England and Wales.
The address of the Company’s
registered office is shown below.
Details of related undertakings
including principal activity, country
of incorporation and percentage of
shares held by the Company are
listed in note 20. The ultimate parent
company and controlling party is
Superdry plc. The primary activity
of Superdry plc is to be the ultimate
parent of the subsidiaries and incur
expenses in relation to being a plc.
The registered office address of each
related undertaking is listed below:
UK
Superdry plc
C-Retail Limited
DKH Retail Limited
SuperGroup Concessions Limited
SuperGroup Internet Limited
Unit 60 The Runnings
Cheltenham
Gloucestershire
GL51 9NW
United Kingdom
Asia
SuperGroup India Private Limited
401-407 (4th Floor), Tolstoy House
Tolstoy Marg
New Delhi – 110001
India
Superdry Mumessillik Hizmet ve
Ticaret Limited Sirketi
Baglar Mahallesi Yavuz Sultan Selim
Caddesi Canel
Plaza no: 15
Kat 9 Bagcılar-istanbul
Turkey
Superdry Hong Kong Limited
1106-8, 11th Floor, Tai Yau Building
No 181 Johnston Road
Wanchai
Hong Kong
Trendy & Superdry Holding Limited
13th Floor Gloucester Tower
The Landmark
15 Queen’s Road
Central
Hong Kong
North America
Superdry Retail LLC
Superdry Wholesale LLC
SuperGroup USA Inc
160 Greentree Drive
Suite 101
Dover
DE 19904
USA
Europe
SuperGroup Europe BVBA
SuperGroup Belgium NV
SuperGroup Belgium Finance NV
Industrielaan 3
1702 Dilbeek
Brussels
Belgium
Superdry Germany GmbH
Sendlinger Str.6
80331
Munich
Germany
Superdry France SARL
16 Rue Portalis
75008
Paris
France
SuperGroup Netherlands BV
SuperGroup Netherlands Retail BV
Nieuwstraat 156
5126CH
Gilze
The Netherlands
SuperGroup Retail Spain S.L.U
C/Sancho de avila
Num. 52-58
Planat 2, Puerta 1-2
08018
Barcelona
Spain
SuperGroup Retail Ireland Limited
c/o Egan O’Reilly Solicitors
19, Upper Mount Street
Dublin 2
Ireland
SuperGroup Sweden AB
c/o CorpNordic Sweden AB
Box 16285
103 25 Stockholm
Sweden
Superdry Norway A/S
Dronningens gate 8B
0151 Oslo
Norway
Superdry Retail Denmark A/S
SuperGroup Nordic and Baltics A/S
Emdrupvej 26 1. Sal
2100 København Ø
Denmark
Horace
703 Route Nationale
83310
Grimaud
France
200
Superdry plc Annual Report 2021
200
Superdry plc Annual Report 2021
Our Financials → Five Year History
(Unaudited)
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses – adjusted
Impairment credit/(losses) on trade receivables
Other gains and losses (net) – adjusted
Operating (loss)/profit before adjusting items – adjusted
Adjusting items (net)
Operating (loss)/profit
Finance costs (net)
Impairment losses on financial assets
Share of loss in investment/joint venture
(Loss)/profit before tax
Tax credit/(expense)
(Loss)/profit for the period
Profit attributable to non-controlling interests
(Loss)/profit attributable to equity shareholders
Adjusted (loss)/profit before tax
Basic earnings per share (pence)
Adjusted basic earnings per share (pence)
Weighted average number of shares (m)
2017
£m
752.0
(299.0)
453.0
(375.4)
–
11.8
2018
£m
872.0
(365.5)
506.5
(418.5)
–
12.3
2019*
£m
871.7
(391.3)
480.4
(447.0)
–
10.8
2020**
£m
704.4
(326.5)
377.9
(412.1)
(9.2)
9.1
2021
£m
556.1
(263.0)
293.1
(321.6)
3.8
19.3
89.4
(2.2)
87.2
0.2
–
(2.6)
84.8
(18.8)
66.0
–
66.0
87.0
81.2
84.5
81.3
100.3
(31.7)
44.2
(116.3)
(34.3)
(125.1)
68.6
(0.3)
–
(3.0)
65.3
(14.6)
50.7
–
50.7
97.0
62.2
93.6
81.5
(72.1)
(1.0)
(10.0)
(6.2)
(89.3)
(12.4)
(159.4)
(7.5)
–
–
(166.9)
23.5
(101.7)
(143.4)
–
–
(101.7)
(143.4)
38.0
(41.8)
(124.2)
(174.9)
32.4
81.9
(43.5)
82.0
(5.4)
(24.1)
(29.5)
(7.2)
–
–
(36.7)
0.6
(36.1)
–
(36.1)
(12.6)
(44.0)
(19.4)
82.0
* Financial year 2019 includes the implementation of IFRS 9 and IFRS 15. Financial periods 2017-2018 have not been restated for this.
** Financial year 2020 includes the implementation of IFRS 16. The comparative periods have not been restated for this.
201
Superdry plc Annual Report 2021
201
Superdry plc Annual Report 2021
Notice of Annual General Meeting (AGM)
Notice of Annual General Meeting (AGM)
Friday 22 October 2021 at 10.00am
AGM
This document is important and requires your
immediate attention: action required
If you are in doubt about any aspect of the proposals
referred to in this document or the action you should
take, you should consult your stockbroker, bank manager,
solicitor, accountant or other independent professional
adviser authorised under the Financial Services and Markets
Act 2000 or, if you reside elsewhere, another appropriately
authorised financial adviser. If you have sold or transferred
your shares in Superdry plc, you should pass this Notice and
accompanying documents to the purchaser or transferee, or
to the person who arranged the sale or transfer, so that they
can pass these documents to the person who now holds
the shares.
Coronavirus (Covid-19)
The Board of Directors (Board or the Directors) of Superdry
plc (Company) has put in place flexible arrangements for
this year’s AGM, to allow for the adaption of plans, should
government guidelines or circumstances change. This could
include limiting the numbers of attendees at the AGM,
should that become necessary. This year’s AGM will be
broadcast as a live webcast, open to shareholders only, with
the option to ask questions. Shareholders wishing to attend
the meeting in person, where this is possible, are asked to
register their intention as soon as practicable by email to
company.secretary@superdry.com. Shareholders wishing
to view the live webcast will need their shareholder
identification number and a PIN, which can be found on
your Form of Proxy or equivalent electronic communication.
Should government rules prohibit attendance, the meeting
will be held as a closed meeting, with the minimum
required quorum.
Shareholders should monitor the Company’s website and
regulatory news announcements for any AGM updates.
Please note that those viewing the live webcast will not be
able to vote or change their vote in ‘real time’. Given the
constantly evolving nature of the Covid-19 pandemic, all
shareholders are encouraged to vote on all resolutions by
appointing the Chair of the meeting as their proxy in the
manner set out below. This will ensure that your vote is
counted even if attendance at the meeting is restricted,
or you are unable to attend in person.
Questions
If you have a question relating to the business of the
meeting, you can either:
• submit a question in advance of the meeting – please send
your question by email to company.secretary@superdry.
com. We will, to the extent appropriate and not already
covered in publicly available materials, respond to your
question(s) as soon as possible. Please note that all
questions should be submitted by 9.00am on Wednesday
20 October 2021. Responses to shareholder questions will
be placed on the Investor section of our corporate website
corporate.superdry.com; or
• ask a question at the meeting or via the live webcast,
subject to any restrictions in place, as above.
As usual, we will announce the results via an RNS and
publish them on our corporate website following the
conclusion of the AGM.
Dear Shareholder
Notice of AGM
I have pleasure in sending you the Notice of the AGM of
Superdry plc. This will be my first AGM as Chair and the
Board and I am looking forward to welcoming shareholders
at our AGM this year, should government guidance allow.
At the time of this notice, it is possible under government
guidelines to host an AGM, but this year we are also offering
shareholders the option of a live webcast. The meeting will
be held at the Company’s Head Office at The Runnings,
Cheltenham, Gloucestershire GL51 9NW. Full details and
instructions of how you can put questions to the Board are
provided in this notice. Explanatory notes on the resolutions
accompany this Notice of AGM.
Biographical details of the Directors seeking re-election or
election can be found in the notes to the resolutions, which
follow the Notice of AGM.
The Board believes that all of the proposed resolutions in
this Notice of AGM are in the best interests of the Company
and shareholders as a whole and recommends that you vote
in favour of the resolutions, as members of the Board intend
to do in respect of their own beneficial shareholdings.
We encourage shareholders to vote on all resolutions
by appointing the Chair of the meeting as their proxy as
set out in note 3 of this document and by returning it to
Computershare Investor Services plc, by no later than
10.00am on Wednesday 20 October 2021. Information
about how to appoint a proxy electronically is also given in
note 3 of this document.
All resolutions will be put to a poll – this reflects best practice
and will ensure that the decisions of all members based on
their shareholding interests are accurately recorded. The poll
results will be announced on Friday 22 October 2021.
Yours faithfully
Peter Sjölander
Chair
24 September 2021
Superdry plc
Unit 60
The Runnings
Cheltenham
Gloucestershire
GL51 9NW
Tel: +44 (0) 1242 578376
corporate.superdry.com
Registered office: as above
Registered in England and Wales
Company number: 07063562
202
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
Notice of Annual General Meeting 2021
Notice is hereby given that the AGM of Superdry plc will
be held at the Company’s Head Office at The Runnings,
Cheltenham, Gloucestershire GL51 9NW on Friday
22 October at 10.00am for the purposes set out below:
Resolutions 1 to 14 and 19 will be proposed as ordinary
resolutions and resolutions 15 to 18 will be proposed as
special resolutions.
Report and Accounts
1. To receive the audited accounts of the Company for the
year ended 24 April 2021 and the Directors’ Report and
the Auditor’s Report.
Remuneration Report
2. To approve the Directors’ Remuneration Report (other
than the part containing the Directors’ Remuneration
Policy) for the year ended 24 April 2021 as set out in
the Annual Report and Accounts.
Remuneration Policy
3. To receive and approve the Directors’ Remuneration
Policy set out in the Annual Report and Accounts FY21,
which will take effect at the conclusion of the meeting.
Directors
4. To re-elect Julian Dunkerton as a Director of
the Company.
5. To re-elect Faisal Galaria as a Director of the Company.
6. To re-elect Georgina Harvey as a Director of
the Company.
7. To re-elect Alastair Miller as a Director of the Company.
8. To re-elect Helen Weir as a Director of the Company.
9. To elect Peter Sjölander as a Director of the Company.
10. To elect Shaun Wills as a Director of the Company.
Auditors
11 To re-appoint Deloitte LLP as the Company’s auditors
to hold office until the conclusion of the next general
meeting of the Company at which accounts are laid.
12 To authorise the Directors to agree the
auditors’ remuneration.
Political donations
13 To consider the following resolution as an
ordinary resolution:
“That the Company and any company which is or
becomes a subsidiary of the Company during the
period to which this resolution relates be and is
hereby authorised to:
a. make donations to political parties and independent
election candidates;
b. make donations to political organisations other than
political parties; and
c. incur political expenditure, during the period
commencing on the date of this resolution and ending
at the close of the AGM of the Company to be held in
2022, provided that in each case any such donations
and expenditure made by the Company and any such
subsidiary shall not exceed £40,000 per company and
together with those made by any such subsidiary and
the Company shall not in aggregate exceed £150,000.
Any terms used in this resolution which are defined in
Part 14 of the Companies Act 2006 (the ‘Act’) shall bear
the same meaning for the purposes of this resolution.”
Directors’ authority to allot shares
14 To consider the following resolution as an
ordinary resolution:
a. “That pursuant to Article 6 of the Company’s Articles
of Association and section 551 of the Act, the Board be
authorised to allot shares or grant rights to subscribe
for or to convert any securities into shares:
up to a nominal amount of £1,367,467; and
b. comprising equity securities (as defined in the Act)
up to a nominal amount of £2,734,935 (such amount
to be reduced by the aggregate nominal amount of
any allotments or grants made under (a) above) in
connection with an offer by way of a rights issue to
ordinary shareholders in proportion (as nearly as may
be practicable) to their existing holdings and to people
who are holders of other equity securities if this is
required by the rights of those securities or, if the
Directors consider it necessary, as permitted by
the rights of those securities, and so that the Board
may impose any limits or restrictions and make
any arrangements which it considers necessary or
appropriate to deal with fractional entitlements, record
dates, legal, regulatory or practical problems in, or
under the laws of, any territory or any other matter.
Such authorities shall apply until the end of the AGM of
the Company to be held in 2022 (or, if earlier, 15 months
from the date of this resolution) but, in each case, so that
the Company may make offers and enter into agreements
during the relevant period which would, or might, require
shares to be allotted or rights to be granted after the
authority ends and the Board may allot shares or grant
rights under any such offer or agreement as if the
authority had not ended. This resolution revokes and
replaces all unexercised authorities previously granted to
the Board to allot shares or grant rights for or to convert
any securities into shares but without prejudice to any
such allotment of shares or grant of rights already made,
offered or agreed to be made pursuant to such authorities.”
Disapplication of pre-emption rights
15 To consider the following resolution as a special
resolution:
“That, if resolution 14 is passed, the Board be authorised
to allot equity securities (as defined in the Act) for cash
under the authority given by that resolution and/or to sell
ordinary shares held by the Company as treasury shares
as if section 561 of the Act did not apply to any such
allotment or sale, such authority to be limited to:
a. the allotment of equity securities in connection with a
rights issue or any other offer to holders of ordinary
203
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
shares in proportion (as nearly as practicable) to their
respective holdings and to holders of other equity
securities as required by the rights of those securities
or as the Board otherwise consider necessary, but
subject to such exclusions or other arrangements as
the Board deems necessary or expedient in relation to
treasury shares, fractional entitlements, record dates,
legal or practical problems in or under the laws of any
territory or the requirements of any regulatory body or
stock exchange; and
b. the allotment (otherwise than pursuant to sub-
paragraph (a) above) of equity securities or sale of
treasury shares up to an aggregate nominal value
of £205,120.
Such authority to expire at the end of the AGM of the
Company to be held in 2022 (or, if earlier, 15 months
from the date of this resolution) but, in each case, prior
to its expiry the Company may make offers, and enter
into agreements, which would, or might, require equity
securities to be allotted (and treasury shares to be sold)
after the authority expires and the Board may allot equity
securities (and sell treasury shares) under any such offer
or agreement as if the authority had not expired.”
16 To consider the following resolution as a special resolution:
“That if resolution 14 is passed, the Board be authorised
in addition to any authority granted under resolution 15
to allot equity securities (as defined in the Act) for cash
under the authority given by that resolution and/or to sell
ordinary shares held by the Company as treasury shares
for cash as if Section 561 of the Act did not apply to any
such allotment or sale, such authority to be:
a. limited to the allotment of equity securities or sale of
treasury shares up to a nominal value of £205,120; and
b. used only for the purposes of financing (or refinancing,
if the authority is to be used within six months after
the original transaction) a transaction which the
Board determines to be an acquisition or other capital
investment of a kind contemplated by the Statement
of Principles on Disapplying Pre-Emption Rights most
recently published by The Pre-Emption Group prior to
the date of this notice.
Such authority to expire at the end of the AGM of the
Company to be held in 2022 (or, if earlier, 15 months
from the date of this resolution) but, in each case, prior
to its expiry the Company may make offers, and enter
into agreements, which would, or might, require equity
securities to be allotted (and treasury shares to be sold)
after the authority expires and the Board may allot equity
securities (and sell treasury shares) under any such offer
or agreement as if the authority had not expired.”
Authority to purchase own shares
17 To consider the following resolution as a special resolution:
“That the Company be and is hereby generally and
unconditionally authorised to make market purchases
(within the meaning of s.693 of the Act) of its ordinary
shares of 5 pence each in the capital of the Company,
subject to the following conditions:
a. the maximum number of ordinary shares authorised to
be purchased is 8,204,805.
b. the minimum price (exclusive of expenses) which may
be paid for an ordinary share is 5 pence (being the
nominal value of an ordinary share);
c. the maximum price (exclusive of expenses) which may
be paid for each ordinary share is the higher of: (i) an
amount equal to 105% of the average of the middle
market quotations of an ordinary share of the Company
as derived from the London Stock Exchange Daily
Official List for the five business days immediately
preceding the day on which the ordinary share is
contracted to be purchased; and (ii) an amount equal
to the higher of the price of the last independent
trade of an ordinary share and the highest current
independent bid for an ordinary share as derived from
the London Stock Exchange Trading System (SETS);
d. this authority shall expire at the close of the AGM
of the Company to be held in 2022 (or, if earlier,
15 months from the date of this resolution);
e. a contract to purchase shares under this authority
may be made prior to the expiry of this authority, and
concluded in whole or in part after the expiry of this
authority; and
f. all ordinary shares purchased pursuant to the said
authority shall be either:
a. cancelled immediately upon completion of the
purchase; or
b. held, sold, transferred or otherwise dealt with as
treasury shares in accordance with the provisions
of the Act.”
Notice period for general meetings, other
than AGMs
18 To consider the following resolution as a special
resolution: “That a general meeting (other than an AGM)
may be called on not less than 14 clear days’ notice.”
Amendment to Performance Share Plan
(PSP) rules
19 To consider the following resolution as an ordinary
resolution: “That the proposed amendment to the rules
of the Superdry Performance Share Plan (the PSP) in
respect of its 5% dilution limit, in the form presented to
the AGM and as summarised in the explanatory notes
section of this Notice of AGM, be approved and the
Directors be authorised to make the amendment to
the rules of the PSP and to do all such other acts and
things as they may consider appropriate to implement
the amendment.”
By order of the Board
Ruth Daniels
Company Secretary
24 September 2021
204
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
Explanatory notes to Notice of AGM
Receiving the Directors’ Report and Accounts
(resolution 1)
The Directors must present the Directors’ Report and the
accounts of the Company for the year ended 24 April 2021
to shareholders at the AGM. The Directors’ Report, the
accounts, and the Auditor’s Report (on the accounts and on
those parts of the Directors’ Remuneration Report that are
capable of being audited) are contained within the Annual
Report and Accounts.
Approval of Directors’ Remuneration Report
(resolution 2)
Resolution 2 seeks approval by shareholders of the
Directors’ Remuneration Report (other than the part
containing the Remuneration Policy) for the year ended
24 April 2021, which can be found in the Annual Report and
Accounts and gives details of the Directors’ remuneration for
the same year ended 24 April 2021. The vote is advisory only
and does not affect the actual remuneration paid to any
individual Director.
Approval of Directors’ Remuneration Policy
(resolution 3)
The current Directors’ Remuneration Policy was approved
by shareholders at the 2020 AGM. The Companies Act 2006
(Act) requires the Company to obtain shareholder approval
of its Directors’ Remuneration Policy at least every three
years. However, due to changes proposed in the Directors’
Remuneration Policy, the Company is seeking the approval
of shareholders of its Directors’ Remuneration Policy at
the AGM, which can be found in the Annual Report and
Accounts. The vote on this resolution is a binding vote
and, if passed, will mean that the Directors can only make
remuneration payments in accordance with the approved
policy. If approved, the policy will take effect immediately
after the conclusion of the AGM.
Re-election of Directors (resolutions 4 to 10)
Resolutions 4 to 10 (inclusive) propose the re-election of
each of the Directors of the Company. The Board is satisfied
that each Non-Executive Director proposed for re-election
is independent for the purposes of the UK Corporate
Governance Code (with the exception of the Chair whose
independence was determined on his appointment only)
and there are no relationships or circumstances likely to
affect their character or judgement.
Julian Dunkerton was appointed at the end of financial year
2019. Georgina Harvey, Faisal Galaria, Alastair Miller and
Helen Weir were each appointed in financial year 2020.
Peter Sjölander was appointed at the start of financial year
2022. All of the Directors seeking re-election have wide
business knowledge and bring valuable skills and experience
to the Board. The Chair considers that each of the Directors
proposed for election or re-election continues to make an
effective and valuable contribution and demonstrates
commitment to the role. Separate resolutions will be
proposed for each re-election. Biographies of each of the
Directors seeking election or re-election can be found below.
Julian Dunkerton
Executive Director/Chief Executive Officer
Julian co-founded Superdry in 2003 and went on to build a
global retail business and brand with a reputation for quality,
fit, design, and value for money. In 2010, Julian led the
successful float of Superdry on the London Stock Exchange
at an initial value of £400m. In 2015, Julian stepped down
from his role as Chief Executive, returning to Superdry in
April 2019 and was appointed permanent CEO in December
2020. Julian continues to focus on brand and design and is
an ambassador for sustainability.
Faisal Galaria
Independent Non-Executive Director
Faisal was appointed as a Director of the Board in July 2019.
Faisal is a member of each of the Remuneration, Nomination
and Audit Committees. Faisal brings extensive digital
expertise to the Superdry Board. Faisal is the CEO of Blippar,
a global Augmented Reality technology company. Previously,
he was the Chief Strategy and Investment Officer of
GoCompare Group, where he helped lead its listing on the
London Stock Exchange in November 2016 and oversaw
several successful acquisitions. He has held senior roles
at a number of leading global digital businesses including
Spotify, Kayak.com and Skype and has extensive experience
in management consulting, as a partner at Alvarez & Marsal
and Andersen.
Georgina Harvey
Independent Non-Executive Director
Georgina was appointed as a Director of the Board in July
2019. Georgina is Chair of the Remuneration Committee
and is also a member of each of the Nomination and Audit
Committees. Georgina is an experienced Non-Executive
Director and is a member of the Board of McColls Retail
Group plc, where she is Senior Independent Director and
Chair of the Remuneration Committee; and a member of the
board of Capita plc, where she is Chair of the Remuneration
Committee. Prior to developing her portfolio career, Georgina
spent seven years as managing director of Regionals at
Trinity Mirror, sitting on the Executive Committee.
Alastair Miller
Independent Non-Executive Director
Alastair was appointed as a Director of the Board in July
2019. Alastair is Chairman of the Audit Committee and also
a member of each of the Nomination and Remuneration
Committees. Alastair is a Non-Executive Director of
NewRiver REIT plc, a property investment company
specialising in retail assets where he is the Senior
Independent Director and Chairman of the Remuneration
Committee. Alastair was Chief Financial Officer at New Look
from 2000 until 2014 and was one of the MBO team who
helped take the company private in 2004 and led a number
of subsequent refinancings. Previously he was the Group
Finance Director at RAC, having joined from Price
Waterhouse where he was a management consultant.
Prior to that, he was Finance Director of a company
205
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
within the BTR plc Group. Alastair qualified as a Chartered
Accountant with Deloitte Haskins and Sells and holds a BSc
in Economics.
Helen Weir
Independent Non-Executive Director
Helen was appointed as a Director of the Board and
as Senior Independent Director in July 2019. Helen is a
member of each of the Audit, Nomination and Remuneration
Committees. Helen has extensive experience of both publicly
quoted companies and retail businesses, having been
Finance Director of Marks and Spencer, John Lewis, Lloyds
Bank (where she was also the CEO of the Retail Bank) and
Kingfisher. Helen is a member of the Supervisory Board of
Koninklijke Ahold Delhaize N.V., where she Chairs the
Governance and Nomination Committee, and a Non-
Executive Director of Greencore Group, where she chairs
the Audit Committee. Helen is a Trustee of Marie Curie. Her
previous non-Executive roles include SABMiller, Royal Mail,
and Just Eat. Helen is a qualified Fellow of the Chartered
Institute of Management Accountants and was awarded
a CBE for services to Finance in the 2008 honours list.
Peter Sjölander
Chair and Non-Executive Director
Peter was appointed as a Director and as Chair of the
Board in April 2021. Peter is also Chair of the Nomination
Committee. From 2007 to 2015 Peter was CEO of Helly
Hansen, where he delivered a step change in the
performance of the brand, driving its transition from being
a business focused on its local Scandinavian markets to a
globally recognised brand. Earlier in his career, Peter spent
13 years at Nike in a number of leadership roles across
marketing, product and general management, working in the
Nordics, Netherlands and USA at a time of rapid growth for
the brand. Following that, Peter joined Electrolux, where he
was responsible for brand and product, driving a shift from
an industrial agenda to a consumer centric one. He is
currently a Non-Executive Director of Dometic Group AB
(listed in Sweden) and Fiskars Oyj (listed in Finland). He is
also a senior adviser to Altor Equity Partners and EQT Group.
Shaun Wills
Executive Director/Chief Financial Officer
Shaun was appointed as an Executive Director and Chief
Financial Officer in April 2021. He brings over 30 years’
experience gained in a number of household-name clothing
brands and retailers, most recently as Finance Director of
Marks and Spencer’s Clothing and Home division. He has
operated in both fast-growth and turnaround situations and
is well versed in digital transformation and the complexities
of international expansion. As well as having held a
number of CFO roles, he has also held leadership roles in
Ecommerce, strategy, merchandising, property and logistics,
and has experience as CEO of a multi-brand business.
Shaun is a member of the Chartered Institute of
Management Accountants.
Appointment of auditors and authority for the
Directors to approve the auditor’s remuneration
(resolutions 11 and 12)
The auditor of a Company must be appointed at each
general meeting at which accounts are laid, to hold office
until the conclusion of the next such meeting.
The Board recommends that Deloitte LLP be re-appointed
as auditor of the Company until the conclusion of the next
general meeting at which the accounts are laid, and that
authority is given to the Directors, in accordance with
standard practice, to determine the auditor’s remuneration.
Authority to make political donations
(resolution 13)
It is not proposed or intended to alter the Company’s policy
of not making political donations, within the normal meaning
of that expression. However, given the breadth of the
relevant provisions in the Act it may be that some of the
Company’s activities may fall within the wide definitions
under the Act and, without the necessary authorisation, the
Company’s ability to communicate its views effectively to
political audiences and to relevant interest groups could be
inhibited. Such activities may include briefings at receptions
or conferences – when the Company seeks to communicate
its views on issues vital to its business interests – including,
for example, conferences of a party-political nature or of
special interest groups. Accordingly, the Company believes
that the authority contained in resolution 13 is necessary
to allow it (and its subsidiaries) to fund activities which
it believes are in the interests of shareholders that the
Company should support. Such authority will enable the
Company and its subsidiaries to be sure that they do not,
because of any uncertainty as to the bodies or the activities
covered by the Act, unintentionally commit a technical
breach of the Act. Any expenditure which may be incurred
under authority of this resolution will be disclosed in next
year’s Annual Report and Accounts.
Authority to allot shares (resolution 14)
The Directors may only allot shares or grant rights to
subscribe for, or convert any security into, shares if
authorised to do so by shareholders. The authority
conferred on the Directors at last year’s AGM under
section 551 of the Act to allot shares expires on the
date of the forthcoming AGM.
Accordingly, this resolution 14 seeks to renew the existing
authority under s.551 of the Act which would otherwise
expire at the AGM, to, in the case of paragraph (a), give the
Board authority to allot the Company’s unissued shares up to
a maximum nominal amount of £1,367,467 and, in the case
of paragraph (b), give the Board authority to allot ordinary
shares (including the shares referred to in paragraph (a)) up
to a nominal amount of £2,734,935 in connection with a
pre-emptive offer to existing shareholders by way of a rights
issue (with exclusions to deal with fractional entitlements to
shares and overseas shareholders to whom the rights issues
cannot be made due to legal and practical problems).
206
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
The amount of £1,367,467 represents approximately
one-third of the Company’s issued ordinary share capital as
on 14 September 2021, being the last practicable date prior
to the publication of this notice. The amount of £2,734,935
represents approximately two-thirds of the Company’s
issued ordinary share capital on 14 September 2021, being
the last practicable date prior to publication of this notice.
This renewed authority will remain in force until the AGM to
be held in 2022 (or, if earlier, 15 months from the date of this
resolution). The Board has continued to seek annual renewal
of this authority in accordance with best practice as set out
in the latest institutional guidelines published by The
Investment Association. The Company holds no
treasury shares.
The Board has no present intention to exercise this authority.
However, renewal of this authority will ensure that the
Board has flexibility in managing the Company’s capital
resources so that the Board can act in the best interests of
shareholders generally. If the Board takes advantage of the
additional authority to issue shares representing more than
one-third of the Company’s issued share capital or for a
rights issue where the monetary proceeds exceed one-third
of the Company’s pre-issue market capitalisation, all
members of the Board wishing to remain in office will stand
for re-election at the next AGM following the decision to
make the relevant share issue.
Disapplication of pre-emption rights
(resolutions 15 and 16)
Under s.561(1) of the Act, if the Directors wish to allot
ordinary shares, or grant rights to subscribe for, or convert
securities into ordinary shares, or sell treasury shares for
cash (other than pursuant to an employee share scheme)
they must in the first instance offer them to existing
shareholders in proportion to their holdings. There may be
occasions, however, when the Directors need the flexibility
to finance business opportunities by the issue of shares
without a pre-emptive offer to existing shareholders. This
cannot be done under the Act unless the shareholders
have first waived their pre-emption rights.
Resolution 15 seeks to renew the authority given to the
Board which would otherwise expire at the AGM, to allot
equity securities for cash on a non-pre-emptive basis, (a)
pursuant to a rights issue and so as to allow the Directors
to make exclusions or such other arrangements as may be
appropriate to resolve legal or practical problems which, for
example, might arise with overseas shareholders, or (b) up to
an aggregate nominal amount of £205,120 (which includes
the sale on a non-pre-emptive basis of any shares held in
treasury) and which represents less than 5% of the issued
ordinary share capital of the Company on 14 September
2021, being the latest practicable date prior to publication
of this notice.
The Board seeks an additional authority under resolution 16
to allot equity securities for cash on a non-pre-emptive basis
up to an aggregate nominal amount of £205,120 (which
includes the sale on a non-pre-emptive basis of any shares
held in treasury) and which represents less than 5% of
the issued ordinary share capital of the Company on 14
September 2021, being the latest practicable date prior to
publication of this notice, if used only for the purposes of
financing (or refinancing, if the authority is to be used within
six months after the original transaction) a transaction which
the Board determines to be an acquisition or other capital
investment of a kind contemplated by the Statement of
Principles on Disapplying Pre-Emption Rights most recently
published by The Pre-Emption Group prior to the date of
this notice.
The authorities contained in resolutions 15 and 16 will expire
at the conclusion of the AGM to be held in 2022 (or, if earlier,
15 months from the date of the resolutions).
The Board has continued to seek annual renewal of the
authority to disapply pre-emption rights in accordance with
best practice. In accordance with the latest guidelines issued
by The Pre-Emption Group, the Board confirms its intention
that no more than 7.5% of the issued share capital will be
issued for cash on a non-pre-emptive basis during any
rolling three-year period.
The Board has no present intention of exercising these
authorities. The renewal of the existing authority under
resolution 15 and the additional authority sought under
resolution 16 will ensure that the Board has flexibility in
managing the Company’s capital resources so that the
Board can act in the best interests of shareholders generally.
Authority to purchase own shares
(resolution 17)
Resolution 17 gives the Company authority to buy back its
own ordinary shares in the market as permitted by the Act.
This renews the authority granted at last year’s AGM which
expires on the date of the AGM. The authority limits the
number of shares that could be purchased to a maximum
of 8,204,805 (representing 10% of the issued share capital
of the Company on 14 September 2021, being the latest
practicable date prior to publication of this notice) and sets
minimum and maximum prices. This authority will expire
at the conclusion of the AGM of the Company next year
(or, if earlier, 15 months from the date of this resolution).
The Directors have no present intention of exercising the
authority to purchase the Company’s ordinary shares but will
keep the matter under review, considering the cash reserves
of the Company, the Company’s share price and other
investment opportunities. The authority will be exercised
only if the Directors believe that to do so will result in an
increase in earnings per share and will be in the interests
of shareholders generally.
207
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
Any purchase of ordinary shares will be by means of market
purchases through the London Stock Exchange. Any shares
purchased under this authority may either be cancelled or
held as treasury shares. Treasury shares may subsequently
be cancelled, sold for cash or used to satisfy options issued
to employees pursuant to the Company’s employee share
schemes. On 14 September 2021, being the latest
practicable date prior to publication of this notice, there
were options over 1,652,409 ordinary shares in the capital
of the Company which represent 2.01% of the Company’s
issued ordinary share capital.
If the authority to purchase the Company’s ordinary
shares was exercised in full, these options would thereafter
represent 2.24% of the Company’s issued ordinary
share capital.
The authority will only be valid until the conclusion of the
next AGM in 2022 (or, if earlier, 15 months from the date of
this resolution). The current Articles of Association provide
the Company with the power to purchase its own shares
(Article 46) and the Company has sought the authority of
the shareholders to do this by way of special resolution.
Notice of general meetings (resolution 18)
Under the Shareholder Rights Regulations the notice period
for general meetings of the Company under the Act is 21
days unless shareholders approve a shorter notice period,
which cannot, however, be less than 14 clear days’ notice
(other than an AGM which will continue to be held on 21
clear days’ notice). Before the coming into force of the
Shareholder Rights Regulations on 3 August 2009, the
Company was able to call general meetings (other than an
AGM) on 14 clear days’ notice and would like to preserve this
ability. In order to be able to do so in future, shareholders
must have approved the calling of meetings on 21 clear
days’ notice. Resolution 18 seeks such approval.
The approval will be effective until the Company’s next AGM,
when it is intended that a similar resolution will be proposed.
The Company will also need to meet the requirements for
electronic voting under the Shareholder Rights Directive
before it can call a general meeting on 14 clear days’ notice.
It is intended that the shorter notice period would not be
used as a matter of routine for such meetings but only where
the flexibility is merited by the business of the meeting and
is thought to be in the interests of shareholders as a whole.
Amendment to Performance Share Plan (PSP)
rules (resolution 19)
Renewed for 10 years in 2020, the PSP is the Company’s
discretionary long-term incentive arrangement used to grant
and govern share-based awards to selected employees,
including the Company’s Executive Directors.
The current terms of the PSP include that, in any 10 calendar
year period, the Company may not issue (or grant rights to
issue) more than (i) 5% of the issued ordinary share capital
of the Company under the PSP and any other discretionary
employee share plan adopted by the Company (the PSP’s
5% limit) and (ii) 10% of the issued ordinary share capital of
the Company under the PSP and any other employee share
plan (discretionary or otherwise) adopted by the Company
(the PSP’s 10% limit).
Such limits are the PSP’s ‘dilution limits’ and are calculated
by reference to relevant awards with award dates falling in
the 10 calendar year period ending that year that remain
potentially dilutive (assuming maximum vesting) or were
dilutive. In each case, treasury shares count as new issue
shares for the purposes of these limits, unless institutional
investor guidelines cease to require them to count as such.
As at the date of the publication of this notice, little
headroom remains against the PSP’s 5% limit and overall
dilution for the purposes of the PSP’s 10% limit stands at
approximately 7%.
The pressure on the PSP’s 5% limit has arisen as a result
of the Company’s low share price in recent years and the
widening of our award policy under PSP (in 2020, Restricted
Share Awards were granted to c.550 employees below
Board level, 428 of which had no prior awards under
the PSP).
To ensure adequate scope to operate desired award policy
over the coming years, resolution 19 seeks shareholders’
approval for the disapplication of the PSP’s 5% limit to leave
the PSP’s 10% limit as the PSP’s sole dilution limit in relation
to both current awards and future awards.
The proposed disapplication of the PSP’s 5% limit is
supported by the Remuneration Committee of the Board and
has been the subject of consultation with investors, together
with the proposed new Directors’ Remuneration Policy.
Reintroducing the application of the PSP’s 5% limit would be
kept under review by and at the discretion of the
Remuneration Committee of the Board.
No other changes are proposed to the PSP and subject to
shareholder approval the disapplication of the PSP’s 5% limit
would become effective upon such approval.
A marked-up copy of the rules of the PSP will be available for
inspection from the date of notice until the conclusion of the
AGM, at our registered office in line with note 8 of the Notes
to the Notice of AGM, below, at corporate.superdry.com and
at the AGM.
208
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
How to join the meeting
This year we will be hosting a live webcast, giving you the
opportunity to attend the meeting in person or to join
online, using your smartphone, tablet or computer.
If you choose to join online, you will be able to view a live
webcast of the meeting and ask questions in real time, but
voting will not be enabled.
Visit: meetnow.global/MAA4A5N
You will need the latest version of Chrome, Safari, Edge
or Firefox.
Please ensure your browser is compatible.
MEETING ACCESS
To login you must have your Shareholder Reference Number
and PIN.
22 OCTOBER 2021 AT 10:00AM
You will be able to log into the site from 9.30am.
Messaging
Any eligible member attending remotely is eligible to partake
in the discussion.
Type your message into the box at the bottom of the screen,
select a relevant topic (if applicable) and press ‘Send’
to submit.
If you have trouble logging in, call the number provided.
Superdry’s 2019 Annual General Meeting will be
held at the Company’s Head Office, The Runnings,
Cheltenham, Gloucestershire, GL51 9NW as
indicated on the map below:
If you are attending in person please join us at our Head
Office, The Runnings, Cheltenham, Gloucestershire,
GL51 9NW on Friday 22 October at 10.00am.
.Plc
R
u
n
T he R unnings
G
M
g
n
s
A
L
a
n
n
i
Kingsditch Lane Wym ans Lane
e
i
R
S
o
n
d
w
o
n
A
4
0
1
8 T
e
w
k
e
s
b
u
ry R
o
a
d
www. corporate.superdry.com
a
d
Notes to Notice of AGM
1. Documents enclosed
corporate.superdry.com
22657_Superdry NOM 2019.indd 1
04/08/2019 13:38:16
Access
Once the web-page above has loaded into your web browser,
select Shareholder on the login screen and enter your
Shareholder Reference Number and PIN. If you are a proxy
or corporate representative, select Invitation and enter your
credentials, which you will receive via email.
Click “JOIN MEETING NOW”.
If you are a guest:
Only invited guests will be permitted to attend the meeting.
If you wish to attend, you will need to contact Superdry plc.
Please note, guests will not be able to ask questions.
Navigation
When successfully authenticated, the home screen will be
displayed. You can view Company information, ask questions
and watch the webcast.
You will have options to ask questions and view
meeting materials.
If viewing on a computer the webcast will appear
automatically once the meeting has started.
This Notice of AGM is being sent to all shareholders who
have requested to receive shareholder communications in
paper form. It is also available at corporate.superdry.com.
A Form of Proxy is enclosed with this notice.
26657 1 August 2019 11:21 am PROOF 4
2. Entitlement to attend and vote
Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, only those members entered in the
register of members of the Company at the close of
business on 20 October 2021, or, if this AGM is adjourned,
in the register of members at the close of business two
days before any adjourned meeting, shall be entitled to
vote at the AGM in respect of the number of ordinary
shares registered in their name at that time. Changes
to the entries in the register of members after close of
business on 20 October 2021, or, if this AGM is adjourned,
in the register of members at the close of business two
days before any adjourned meeting, shall be disregarded
in determining the rights of any person to vote at
the AGM.
To facilitate entry to the webcast, shareholders are
requested to use their Shareholder Reference Number
(SRN) and PIN shown on their attendance card/Form of
Proxy to log in to the webcast on their electronic device
(whether by smart phone, tablet or PC). For further
information please refer to the section ‘Entry to the live
webcast’ (note 5) of this notice. Persons who are not
shareholders of the Company (or their appointed proxy
or corporate representative) will not be able to attend the
AGM unless prior arrangements have been made with
the Company.
209
Superdry plc Annual Report 2021
Notice of Annual General Meeting (AGM)
Where a member is appointing a third party as their
proxy to attend the meeting on their behalf or, where
a corporate member is appointing someone as their
representative, the appointee’s contact email address
and, in the case of an individual representing a corporate
member, a copy of the Letter of Representation, must
be provided to Computershare by emailing corporate-
representatives@computershare.co.uk to enable the
provision of access credentials. Access credentials will
be emailed to the appointee one working day prior to
the meeting.
3. Proxies, corporate representatives and
nominated persons
Proxies
Registered shareholders may appoint a proxy to exercise
all or any of their rights to vote on their behalf.
A shareholder may appoint more than one proxy
provided that each proxy is appointed to exercise the
rights attached to a different share or shares held by that
shareholder. A proxy need not be a shareholder of the
Company and may be appointed by:
a. completing and returning the Form of Proxy attached
to this Notice;
b. as an alternative to completing the hard copy Form of
Proxy, shareholders can appoint a proxy electronically
by going to the following website: www.investorcentre.
co.uk/eproxy. You will be asked to enter the Control
Number, the Shareholder Reference Number (SRN)
and PIN as provided on your Form of Proxy and agree
to certain terms and conditions;
c. if you are a user of the CREST system (including
CREST Personal Members), having an appropriate
CREST message transmitted.
CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service
may do so for the AGM and any adjournment by using
the procedures described in the CREST manual (www.
euroclear.com/CREST). CREST personal members or
other CREST sponsored members, and those CREST
members who have appointed a voting service provider,
should refer to their CREST sponsor or voting service
provider, who will be able to take the appropriate action
on their behalf.
In order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate
CREST message (a CREST Proxy Instruction) must be
properly authenticated in accordance with Euroclear’s
specifications and must contain the information required
for such instructions, as described in the CREST manual.
All messages relating to the appointment of a proxy or
an instruction to a previously appointed proxy must be
transmitted so as to be received by the Company’s agent
(ID. Number 3RA50) 48 hours before the AGM. It is the
responsibility of the CREST member concerned to
take such action as shall be necessary to ensure that
a message is transmitted by means of the CREST
system by any particular time. In this connection,
CREST members and, where applicable, their CREST
210
sponsors or voting service providers are referred, in
particular, to those sections of the CREST manual
concerning practical limitations of the CREST system
and timings. The Company may treat a CREST Proxy
Instruction as invalid in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
IMPORTANT: To be effective your Form of Proxy must
be received by the Company’s registrars no later than
10.00am on Wednesday 20 October 2021. Further details
regarding the appointment of proxies are given in the
notes to the Form of Proxy. The rights of shareholders in
relation to the appointment of proxies as stated above
do not apply to a person nominated under s.146 of the
Companies Act 2006 (the Act) to enjoy information rights
(a Nominated Person). Such rights can only be exercised
by shareholders of the Company.
If you wish your proxy appointee to attend the
meeting virtually, please contact Computershare
Investor Services plc by email on corporate-
representatives@computershare.co.uk or alternatively
call +44 (0370) 889 3102, providing details of your proxy
appointment including their email address so that unique
credentials can be issued to allow the proxy to access the
electronic meeting. Access credentials will be emailed to
the appointee one working day prior to the meeting. Lines
are open 8.30am to 5.30pm Monday to Friday (excluding
bank holidays).
Corporate representatives
Corporate shareholders may appoint one or more
corporate representatives, who may exercise on its behalf
all its powers, provided that if two or more representatives
are appointed either: (i) each corporate representative is
appointed to exercise the rights attached to a different
share or shares held by that shareholder; or (ii) the
corporate representatives vote in respect of the same
shares, the power is treated as exercised only if they
purport to exercise the power in the same way as each
other (in other cases, the power is treated as unexercised).
If you are appointing a corporate representative, or
have been appointed a corporate representative and
wish to attend the meeting virtually, please contact
Computershare Investor Services plc by emailing
corporate-representatives@computershare.co.uk
providing details of your appointment including their
email address, confirmation of the meeting they wish to
attend and a copy of the Letter of Representation, so that
unique credentials can be issued to allow the corporate
representative to access the electronic meeting. Access
credentials will be emailed to the appointee one working
day prior to the meeting. If documentation supporting the
appointment of the corporate representative is supplied
later than the deadline for appointment of a proxy
(48 hours prior to the meeting), issuance of unique
credentials to access the meeting will be issued on
a ‘best endeavours’ basis.
Nominated Person(s)
Any Nominated Person to whom this Notice has been
sent may, under an agreement between him/her and the
Superdry plc Annual Report 2021 Notice of Annual General Meeting (AGM)
shareholder by whom he/she was nominated, have a right
to be appointed (or to have someone else appointed) as
a proxy for the AGM. If a Nominated Person has no such
proxy appointment right or does not wish to exercise it,
he/she may, under such agreement, have a right to give
instructions to the shareholder as to the exercise of
voting rights.
4. AGM business
Shareholders have a right to ask questions relating to the
business of the AGM and the Company must cause such
questions to be answered, unless such answers would
interfere unduly with the business of the AGM, involve the
disclosure of confidential information, if the answer has
already been published on the Company’s website or if it
is not in the interests of the Company or the good order
of the AGM that the question be answered.
5. Entry to the live webcast
In order to participate in the live webcast, you will need
to visit meetnow.global/MAA4A5N on your device
operating a compatible browser using the latest version
of Chrome, Firefox, Edge or Safari. Please note that
Internet Explorer is not supported. It is highly
recommended that you check your system
capabilities in advance of the meeting day.
If you are a shareholder, you can use your unique
Shareholder Reference Number and PIN as displayed
on your Form of Proxy/Attendance Card. If you are an
appointed proxy or a corporate representative you will
have had to be provided with a unique invite code to
access the meeting and exercise your rights. These
credentials will be issued one working day prior to
the meeting, conditional on evidence of your proxy
appointment or corporate representative appointment
having been received and accepted. If you have not been
provided with your meeting access credentials, please
ensure you contact Computershare on the morning of
the meeting, but no later than one hour before the start
of the meeting.
Access to the meeting via meetnow.global/MAA4A5N
will be available from 22 October 2021 at 9:30am. During
the meeting, you must ensure you are connected to the
internet at all times in order to participate in the meeting.
Therefore, it is your responsibility to ensure connectivity
for the duration of the meeting.
6. Technical issues
If you experience any technical issues with the site, you
may either call our registrar on the telephone number
provided on the site or once you have entered the
meeting, you can raise your question using the chat
function. If you have technical issues prior to the start
of the meeting you should contact our registrar on the
shareholder helpline.
7. Website publication of audit concerns
Under section 527 of the Act, shareholders meeting the
threshold requirements set out in that section have the
right to request publication on the Company’s website of
any concerns that they propose to raise at the AGM
relating to:
i. the audit of the Company’s accounts (including the
Auditor’s Report and conduct of the audit) that are
to be submitted to the AGM; or
ii. any circumstance connected with an auditor of
the Company ceasing to hold office since the last
AGM of the Company. The Company will publish the
statement if sufficient requests have been received
in accordance with section 527(2) of the Act. The
Company may not require the shareholders requesting
any such website publication to pay its expenses in
complying with sections 527 to 528 of the Act. Where
the Company is required to place a statement on a
website under section 527 of the Act, it must forward
the statement to the Company’s auditor not later than
the time when it makes the statement available on the
website. The business which may be dealt with at the
AGM includes any statement that the Company has
been required under section 527 of the Act to publish
on a website.
8. Total voting rights
On 14 September 2021, being the last practicable date
prior to the publication of this Notice, the Company’s
issued share capital consisted of 82,048,045 ordinary
shares, carrying one vote each. Therefore, the total
exercisable voting rights in the Company on
14 September 2021 are 82,048,045.
9. Sending documents relating to the AGM to the
Company
Any documents or information relating to the proceedings
at the AGM may only be sent to the Company at its
registered office address. Shareholders may not use any
electronic address provided in this Notice or any related
documents (including the Form of Proxy) to communicate
with the Company for any purpose other than
expressly stated.
10. Documents available for inspection
Copies of the following documents are available for
inspection at an agreed time during normal business
hours (Saturdays, Sundays and public holidays excepted)
at the Company’s offices at Unit 60, The Runnings,
Cheltenham, Gloucestershire, GL51 9NW from 9.00 am
on the date of publication of this Notice until the
conclusion of the AGM (email during normal business
hours as noted above to company.secretary@superdry.
com): Executive Directors’ service contracts, Non-
Executive Directors’ letters of appointment, a copy of
the Articles of Association of the Company and a copy
of the rules of the Superdry Performance Share Plan.
11. Information available on website
In accordance with section 311A of the Act, a copy of this
notice is available on the Company’s website corporate.
superdry.com.
12. Voting outcome
The results of the voting will be announced through
a Regulatory Information Service and will appear on
the Company’s website corporate.superdry.com on
22 October 2021.
211
Superdry plc Annual Report 2021 Shareholder Information
Shareholder information
Registered office
Unit 60 The Runnings
Cheltenham
Gloucestershire
GL51 9NW
Registered in England and Wales
Registered number 07063562
T: +44 (0) 1242 578376
Shareholder enquiries: company.secretary@superdry.com
Investor Relations: investor.relations@superdry.com
Share registrar
For shareholder queries:
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Shareholder information line 0370 889 3102
Lines are open Monday to Friday, excluding bank holidays
and weekends, 8.30am to 5.30pm (+44 370 889 3102
if calling from outside the UK).
For those with hearing difficulties, a textphone is available
on 0370 702 0005 for UK callers with compatible equipment.
AGM
The AGM will be held on Friday 22 October 2021 at 10.00am.
The notice of meeting is in this report and is also available
at corporate.superdry.com. The results of the meeting
will be accessible on corporate.superdry.com shortly
after the meeting.
Dividend
No interim dividend was paid, and no final dividend has been
proposed for FY21.
Electronic communications
Shareholders may choose to receive all shareholder
documentation in electronic form, rather than by post.
If you elect this option, you will receive an email each
time a shareholder document is published on our website.
Tax vouchers and annual statements will be sent to your
Investor Centre account. You can register for the Investor
Centre at www.computershare.com/investor.
To receive documents in electronic form, you need to
change your preferences on your Investor Centre account,
or alternatively you can call the shareholder information line
on 0370 889 3102.
Share dealing
Superdry plc certificated shares can be traded through most
banks, building societies or stockbrokers. Computershare
offers telephone and internet dealing services. Terms and
Conditions and details of commission charges are available
on request from Computershare.
This service is available Monday to Friday, 8.00am to
4.30pm, excluding bank holidays and weekends, where a
professional and qualified dealer will be pleased to assist
you. Please call 0370 703 0084 and ensure you have your
Shareholder Reference Number (SRN) ready when you
make the call. The SRN appears on your share certificate.
To register for internet dealing services visit
www.computershare-sharedealing.co.uk
Share price information
The latest Superdry plc share price is available at
www.corporate.superdry.com
Unauthorised brokers (boiler room scams)
Shareholders are advised to be very wary of any unsolicited
advice, offers to buy shares at a discount or offers of free
company reports. If you receive any unsolicited investment
advice, please check with the Financial Conduct Authority
(FCA) before getting involved by visiting www.fca.org.uk/
register/. If you think you have been approached by an
unauthorised firm, you should contact the FCA consumer
helpline on 0800 111 6768. Further information can be
found at www.fca.org.uk
Cautionary statement
This FY21 Annual Report and Accounts (Report) contains
certain forward-looking statements with respect to financial
condition, results of the operations and businesses of
Superdry plc. These statements and forecasts involve risk,
uncertainty and assumptions because they relate to events
and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual
results or developments to differ materially from those
expressed or implied by these forward-looking statements.
These forward-looking statements are made only as at the
date of this Report. Except as required by law, Superdry plc
has no obligation to update the forward-looking statements
or to correct any inaccuracies therein.
The information in this Report is deemed to constitute inside
information as stipulated by the Market Abuse Regulation
(EU) No. 596/2014. Upon the publication of this Report, this
information is now considered to be in the public domain.
Designed and produced by Black Sun plc.
CBP008650
This report is printed on paper certified in accordance with the FSC®
(Forest Stewardship Council®) and is recyclable and acid-free.
Pureprint Ltd is FSC certified and ISO 14001 certified showing that it is
committed to all round excellence and improving environmental
performance is an important part of this strategy.
Pureprint Ltd aims to reduce at source the effect its operations have on
the environment and is committed to continual improvement, prevention
of pollution and compliance with any legislation or industry standards.
Pureprint Ltd is a Carbon / Neutral® Printing Company.
212
Superdry plc Annual Report 2021 ←
Superdry X
(Back Cover)
↓ Superdry
Performance
Sport