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Tariff Quote Watch: Superdry Bails Out of China Sourcing as Shipments Sink

China 2207 Cons. Discr. - Apparel 292 Cons. Discr. - Retailing 225 Tariff Quote Watch 192 Tariffs 1505 Turkey 43 U.S. 3976 Xpressfeed 19

Clothing seller Superdry has issued a profit warning, noting a disappointing holiday sales season, the Financial Times reports. Superdry CEO Julian Dunkerton stated in remarks on Jan. 10 that trading since Black Friday :has been tougher than we expected” and that “reducing promotions helped our margin, but this wasn’t enough to make up for the reduced volumes.”

While the group is focused on Europe currently – S&P Global Market Intelligence data shows that only 15.9% of sales fall outside of Europe – it has been attempting to expand its presence internationally. The United States then represents one such market, but one where it has been lagging. 

Panjiva data, retrieved via Xpressfeed shows that Imports to the U.S. associated with Superdry have fallen 65.5% year over year in the three months to Dec 31. That followed a 30.5% drop in the prior three quarters on average.

SUPERDRY BOGGED DOWN IN THE U.S.

Chart shows U.S. seaborne imports associated with Superdry. Source: Panjiva

Superdry U.S. supply chain has undergone significant upheaval as a result of the U.S.-China trade war. The firm’s CFO, Nichol Gresham has also stated that the firm is “taking short-term and very remedial actions to stem the losses that we had been seeing from the previous decisions and previous strategy.

Gresham is likely referring to the fact that shipments linked to the firm were previously sourced from both China and Turkey before switching solely to China in the first half of 2018. This was short lived, as imports from China fell 57.0% year over year in the 12 months to Dec 31.

The shift back to Turkey coincides with the escalation of the U.S.-China trade war in the first half of 2019, culminating in the application of tariffs on apparel imports from China in September, as outlined in Panjiva’s Jan. 9 report.

Imports from Turkey have since overtaken those from China, increasing by 300.0% year over year in the three months to Dec 31, while imports from China have continued to fall, down 87.3% over the same period. Nevertheless, overall drop in imports suggests that Superdry may have its work cut out no matter the tariff situation going forward.

SUPERDRY DIVES BACK INTO TURKEY, CHINA COST ADVANTAGE SOAKED UP BY TARIFFS

Chart segments imports associated with Superdry by origin on a monthly and three month basis. Source: Panjiva

Recreating this analysis in S&P Global Market Intelligence Xpressfeed

To access this data on Xpressfeed, first join the HS Code table for the year you are analyzing, then union that table with additional years as needed. Use the cross apply function to break out the semicolon delimited HS code field, and clean using the replace and trim functions. The resulting subquery is then filtered for companies with “Superdry” in the shipper or consignee name, and HS Codes beginning with ‘6’.

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