Struggling UK fashion retailer Superdry expects stunted revenue growth this fiscal year after reporting a bigger than expected annual loss on Friday, saying the cost-of-living crisis and fall in real wages led to weaker sales.

The company, whose fashion line mostly includes sweatshirts, hoodies and jackets, has also been grappling with weak orders from wholesale partners, who have been cautious on stock levels and liquidity amid economic uncertainties.

Superdry had delayed publication of its annual results on Thursday and requested that its shares be suspended until after the results release.

“This has been a difficult year for the business and the market conditions have been extremely challenging, especially in wholesale,” founder and CEO Julian Dunkerton said in a statement.

Revenue for its first quarter that ended in July tumbled 18.4 percent, hurt by lower demand for its Spring/Summer collection due to extreme weather across Europe and a later start to its end-of-season sale.

“Our new Autumn/Winter collection is selling better this early in the season than usual,” the company said.

Superdry has been raising funds to bolster its finances and said cutting costs was a priority.

“For the full year, we don’t expect to see significant revenue growth as we focus on cost savings and margin improvement,” the company said.

Superdry shares, which were still suspended on Friday, have lost more than half their value this year.

The company reported an adjusted pretax loss of £21.7 million ($27.46 million) for the year ended April 29, 2023, compared with a profit of £21.6 million.

“Following the Christmas holidays, what is traditionally a slower trading period was exacerbated by the emerging cost-of living crisis and falling real wages, resulting in slower sales than expected across all territories towards the end of our fiscal year,” it added.

By Yadarisa Shabong; Editors: Dhanya Ann Thoppil and Susan Fenton

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