Superdry cut £40m in logistics in two years

Superdry CEO Shaun Packe revealed his cost-cutting strategies at Drapers Supply Chain Summit

It is almost a year since Superdry delisted from the London Stock Exchange in July 2024. During the year, the business has taken £116m in costs out of the business as part of a post-Covid restructuring process.

“The restructuring process enabled us to renegotiate leases with landlords,” said Packe. This alone saved the business £50m.

“We couldn’t afford to keep all of the processes [in place]”, he continued.

Superdry compared its cost of logistics and turnover with what Packe described as “the best in market” such as Next: “This enabled us to take the emotion out of [the cost cutting].” Packe said the retailer was then able to save more than £40m just in logistics in two years, reducing its spend on IT from £30m to £13m.

“We simplified top down rather than bottom up,” he said. “It empowered senior leadership to take ownership [of the process].”

In a business that lost £59m last year, future-proofing is essential, explained Packe, particularly considering the current global trading environment.

The recent UK-India trade agreement has been one positive for the “big cotton brand”, as 25% of its product is made in India.

“We’ve been waiting 10 years for this to happen,” said Packe.

Although a deal is still being negotiated, Packe is hoping for October or November, adding that it will save Superdry £3.5m in duties, “which is a lot for any brand”.

However, Packe warned that the deal may cause Indian suppliers to put up prices, and advised that brands with production in the country should “lock in as much capacity as [they] can”, making sure prices are negotiated for at least six to 12 months.

“Lock yourself in and make sure you’re bullet-proof,” he said.

Although 45% of its production is in the Far East, Superdry is fortunate not to feel much negative impact from the ongoing trade war between China and the US, as it conducts no more than 5% of its business in the US.

“The main risk is if a [Chinese] factory lost 40% of its order instantly, it’s a risk to the factory,” he explained. “We need to look at how we can support them and plan differently.”

Packe explained that while some suppliers have Cambodia and Vietnam capabilities and can move business across, “Vietnam can’t cope with the same volumes [as China]”.

The remaining 30% of Superdry’s product is made in Turkey, which Packe said is “good for lead time”.

Superdry has produced in Turkey since its inception, and has “good relationships” with suppliers there. However, inflation is currently around 35% and has previously reached 70% at its peak.

The Turkish government is also increasing minimum wages, “which affects pricing”, said Packe: “A lot of other brands have pulled out of factories there.”

Superdry is now “trying to focus in on a few suppliers to see if we can support them and get them consistent orders,” he added: “We’re loyal to our suppliers – they’re like family members.”

“Margins are better from Turkey,” said Packe. “If you’re paying for product from China, when it hits the shores, it might be another three months before you can sell it, which is a drag on cash.”

“Cash is king,” he continued. “We’re trying to to the best for the business. It’s not personal.”