The British clothing brand Superdry confirmed it will pull out from the Chinese mainland market due to the effects of COVID-19, and will start to close stores in July, according to a statement published on the label’s Weibo account on Wednesday.
All of the company’s stores on the Chinese mainland, including 25 company-owned stores and 41 franchised stores will soon be closed, the statement said. In addition, it will shut down all of its online stores on e-commerce platforms in China, an online sales person from Superdry told the Global Times on Friday.
Earlier this month, the brand announced it would end its cooperation with its Chinese partner Trendy Group, with which Superdry established a joint venture in 2016. In fact, Superdry announced its plans to take full control of its business on the Chinese mainland after an “amicable agreement” with Trendy Group, according to an announcement on June 18.
Superdry recently reported a bleak overall performance under the strains of COVID-19, forcing it to close stores across Europe, the US, and UK by March 22 . The company warned in March that it is likely to miss its annual sales target for 2020, facing “unprecedented challenges” posed by COVID-19.
In its latest financial report, the company saw its store revenue drop by 22.9 percent for the most recent financial year, including a sharp plunge of 57 percent in the fourth quarter, despite revenue doubling from various e-commerce platforms.
The clothing industry around the world has been ravaged by the impacts of COVID-19, which has seen people’s social activities restricted for months in some countries.
Yang Qingshan, a professor at the University of International Business and Economics in Beijing, told the Global Times that the impacts of the coronavirus on the fashion and retailing industries might last longer than initially thought, considering those customers’ spending habits may have changed as economic pressure mounts.
“Globally, the brick and mortar stores still contribute to most of the sales for clothing labels,” Yang said, adding that “with restrictions on social activities still expected to go on for a while, labels across the world are also fearing the loss of a significant amount of their revenue, unless they can shift to online sales platforms in time, or come up with other ways to make up for the revenue loss.”
Several international brands have also had to pull out from the Chinese market under pressure related to COVID-19.
Esprit, a clothing label founded in the US, for example, closed all its China stores earlier in June, 28 years since it first entered the Chinese market.
Guess, another American clothing brand, is also planning to close its stores in China and North America over the next 18 months, according to Bloomberg on June 10, as it struggles with the effects of reduced offline sales in 2020.
File Photo: CFP
