SuperGroup hit by sales fall

By Scott Campbell5:00PM BST 09 May 2014
Sales of the company’s Superdry brand dropped 1.3pc during quarter four

Shares in British fashion retailer SuperGroup tumbled by as much as 20pc on Thursday after the company warned that its full-year profits would be “towards the lower end” of analysts’ estimates.

Sales of the company’s Superdry brand – which first came to prominence after David Beckam wore one of its t-shirts in a photoshoot in 2005 – dropped 1.3pc during quarter four, ending 26 April, on a like-for-like basis compared to the same period last year.

“It is a tricky number but you have to look at the full-year. There is nothing to worry about,” said Mr Dunkerton, who founded the business in Cheltenham in 1985.

“We can explain what happened here. If you look at nine quarters of like-for-like growth it has been a consistent journey.

“Taking a quarter out of context would be crazy really. We are building for the long-term and we have delivered what we said we would.”

The company said that one reason profits were dragged down was because it discontinued its partnership with Ebay, where it sold items at a discounted price, during the year.

Mr Dunkerton added that soaring temperatures over spring meant that customers bought fewer high value items – such as jumpers and gilets – instead purchasing shorts and t-shirts,

Kate Calvert, analyst at Investec, said: “During quarter four, retail space contribution was better than we expected but this was offset by a weak underlying like-for-like sales performance.

“After a year of infrastructure investment, we expect European roll-out to be 2015’s story as the brand gathers momentum internationally.”

Started in 2004, SuperGroup operates 516 stores across the world, with 96 shops and 64 concessions in the UK, including a flagship store on London’s Regent Street.

The company is planning to “further internationalise” its offering with a rollout of stores in mainland Europe.

SuperGroup floated on the London Stock Exchange in 2010 at £5 per share and surged to almost £18 within a year. However, its shares then slumped after three profit warnings, caused by troubles with a warehouse IT system, accounting errors and stock availability issues.

Shares in SuperGroup fell by 12.54pc to close at £11.79.

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