Superdry warns over future as Covid-19 hammers sales | Superdry
The fashion retailer Superdry has warned over its ability to continue as a going concern as multiple coronavirus lockdowns have hammered sales and profits.
Shares fell 11% on Tuesday after Superdry issued the warning and said revenues fell 52% in the 11 weeks to 9 January, due to store closures during the weeks before and after Christmas.
Superdry said: “The group directors noted that the risks set out … indicate that a material uncertainty exists and may cast significant doubt on the group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.”
As of 9 January, 173 stores were temporarily closed, equivalent to 72% of the total. The company posted a pretax loss of £18.9m in the six months to 24 October on revenues of £282.7m, against a £4.2m loss a year earlier.
However, Superdry added that its directors had a “reasonable expectation” that it had sufficient resources to continue to operate for the foreseeable future, and that it would be able to operate within its borrowing facilities and covenants for at least 12 months.
Julian Dunkerton, the co-founder who returned in a boardroom coup last April after the business foundered in his absence, said: “Covid-19 has brought substantial challenges to Superdry as with many other brands, and this has continued through the first half and into the second with renewed lockdowns in our key markets.
“While revenue and underlying profit have been impacted by the external conditions, the brand has continued to focus on the reset, however, with over 70% of stores currently closed and having to shut a significant number over peak, it will take time to see the benefits of all our hard work flow through to the results.”
Online sales were up 13.2% over the 11-week period, helping to offset some of the store losses.
Superdry hopes that its revival will be aided by a three-year partnership with the Brazilian football star Neymar Jr, who will front the launch its new 100% organic underwear and sleepwear collection.
Germany discovers Covid variant in Bavaria
Snow lies in front of the entrance to the Garmisch-Partenkirchen hospital. A possibly new variant of the coronavirus has been discovered at the Garmisch-Partenkirchen hospital. Samples are currently being examined at the Charité hospital in Berlin, the hospital announced on Monday.
picture alliance | picture alliance | Getty Images
Germany is the latest country to discover a new mutation of the coronavirus, with a new variant identified among a group of hospital patients in Bavaria.
Local news outlets first reported on Monday that an unknown variant of the coronavirus had been discovered among 35 patients at a hospital in the Bavarian ski town of Garmisch-Partenkirchen, southeast Germany.
The altered virus was found in 35 of 73 newly-infected people in the hospital, Bavarian news outlet BR24 reported Monday. Samples are now reportedly being examined at the Charité university hospital in Berlin. CNBC contacted Germany’s health ministry for confirmation of the reports.
Officials said the variant is different from recently discovered variants in the U.K. and South Africa.
The hospital’s deputy medical director Clemens Stockklausner told a press briefing on Monday that there was no understanding, as yet, on whether the mutation made the virus more transmissible (as with the variants discovered in Britain and South Africa), or more deadly.
“At the moment we have discovered a small point mutation … and it is absolutely not clear whether it will be of clinical relevance,” Stockklausner said. “We have to wait for the complete sequencing.”
Neither the British nor South Africa variants have been found to cause more fatalities, although as a result of their ability to spread more easily, they have caused more infections, hospitalizations and, sadly, more deaths. The U.K. and Ireland, in particular, have seen a rapid spread of the mutated virus, which has caused a surge in infections and left some hospitals struggling with an influx of patients.
Information about the new variant found in Germany emerged on the same day that the country’s Health Minister Jens Spahn said the current level of coronavirus sequencing in the country was not sufficient and that laboratories would be obliged (and compensated) to sequence coronavirus samples to monitor virus mutations.
A handful of other countries that have discovered coronavirus mutations, including the U.K. and South Africa, are renowned for their large-scale surveillance and genome sequencing of coronavirus samples.
Last week, Dr. Janosch Dahmen, a physician and German parliamentarian with the Green party, told CNBC that “we need a more precise crisis mode here in Germany to fight the pandemic, and I’m very concerned that the numbers (of infections) will go far higher up like we can see in Great Britain and Ireland at the minute.”
Germany’s 16 state premiers are set to meet with Chancellor Angela Merkel on Tuesday to discuss whether to tighten or extend lockdown restrictions across the country that are due to end on Jan. 31.
Germany’s infection rate remains a significant concern, with a further 11,369 daily cases reported by public health agency, the Robert Koch Institute, on Tuesday. That brings the total number of cases to just over 2 million. The death toll stands at 47,622.
Like other European countries, Germany has been anxious to avoid the spread of the more-infectious strains of the virus found in Britain and South Africa.
Merkel reportedly told her Christian Democratic Union (CDU) party lawmakers last week that “if we don’t manage to stop this British virus, then we will have 10 times the number of cases by Easter … We need eight to 10 more weeks of tough measures,” German daily newspaper Bild reported.
On Monday, Spahn insisted that people should not call coronavirus mutation detected in Britain “the English variant.”
“Just as we didn’t talk about the ‘Chinese virus’ last year, now we shouldn’t talk about the ‘English variant,'” Spahn said, Reuters reported.
EU’s Covid vaccination debacle is down to institutional inflexibility | Pharmaceuticals industry
A storm is raging over the EU’s failure to have ordered more of the approved Covid-19 vaccines ahead of time. Stéphane Bancel, the chief executive of the US pharmaceutical company Moderna, which gained approval for its vaccine shortly after Pfizer/BioNTech, claims that the EU has relied too much on “vaccines from its own laboratories”.
Did the European commission prioritise supporting its own pharmaceutical industry over protecting human lives? In fact, matters are not as simple as that. Contrary to what Bancel wants us to believe, the EU has actually ordered too little of its own vaccine. After all, the vaccine that is being administered most widely across the west was developed by a German company, BioNTech, and thus comes from the EU (though it was tested and partly produced in partnership with Pfizer in the US and with Fosun Pharma in China).
Far from having ordered too little of the “American” vaccine, the EU sat back while the US and other countries stocked up on doses of a vaccine that was created and produced in a German lab. The EU is guilty not of protectionism but of institutional inflexibility. The slow vaccine rollout in many European countries is the result of the EU’s failure to coordinate the interests of the various member states. Whereas some countries balked at the price of BioNTech’s mRNA vaccine, others were sceptical about its new gene-based technological underpinnings, and still others simply did not recognise the urgency of the situation, having assumed that the worst of the pandemic had already passed.
To be sure, an inter-European rivalry between national vaccine producers may have contributed to the EU’s unwillingness to preorder more of the German vaccine last summer, as the US and other countries did. As a small startup from Mainz, BioNTech had little chance of being heard above the din of lobbying at the European commission by established European pharmaceutical giants.
Whatever the reason, the severe delay in the supply of vaccines in Europe is now a fact. While the US, the United Kingdom, Japan, and Canada jostled last July and August to secure huge batches of the BioNTech vaccine, the EU initially placed its orders only with Sanofi and AstraZeneca, both of which subsequently admitted difficulties in clinical trials. Not until November – when journalists started asking pointed questions – did the EU strike its first deal for a batch of the BioNTech vaccine. This was followed in December and early January by further purchases, including from Moderna.
Because of the delay in ordering, the deliveries are coming late. After all, producers are operating on a first-come, first-served basis and need time to build up new production sites. As a result, European news media are filled with forlorn images of empty vaccination centres that have run out of supply, alongside footage of overstretched intensive care units. A sense of imminent horror has seized a frightened European public. At this rate, the EU will have no chance of catching up with the US, the UK, Israel and other leading vaccinators until this summer.
The EU contends that it diversified its orders early on because it couldn’t know which vaccine candidates would succeed. But that is a cheap excuse, considering that it still didn’t order nearly enough from any producer to be able to vaccinate its people in the event that only one vaccine candidate reached the approval stage – a distinct possibility at the time.
If the EU had taken the risk of purchasing enough doses to cover two-thirds of its population from each of the six producers it dealt with, it would have needed to spend only €29bn ($35bn). For comparison, that is how much income the EU economy has been losing over the course of only 10 days of the coronavirus crisis. And given that not one but two vaccines have now turned out to be highly effective, the EU would have ended up with a surplus of high-quality doses, which it could have donated to some 300 million people across the developing world.
No single decision-maker bears the blame for Europe’s vaccination debacle. But this episode should make clear that EU member states were wrong to entrust the European commission with the purchase of vaccines last summer. Article 5 of the Treaty on European Union subjects the EU to the subsidiarity principle, which leaves political actions up to member states, except in cases where supranational action can be proven to be more efficient. When it came to securing an ample supply of vaccines, this principle was wilfully ignored. There is neither the legal necessity nor a convincing economic justification for central planning in the procurement of vaccines. Had member-state governments been able to buy vaccines independently and in direct competition with other countries worldwide, they might have had to pay a slightly higher price but they would have placed their orders much earlier to avoid missing the boat. And if orders had been placed earlier, vaccine producers would have been able to invest more in expanding their production capacities.
In the end, central planning and lobbying by established producers created Europe’s vaccine debacle. Europeans will now have to live with the consequences of an avoidable tragedy.
• Hans-Werner Sinn, is professor of economics at the University of Munich. He was president of the Ifo Institute for Economic Research and serves on the German economy ministry’s advisory council.
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