Jul 12, 2012
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SuperGroup pays for mistakes with profit fall

Jul 12, 2012

SuperGroup, the company behind the Superdry fashion label, posted a 15 percent fall in 2011-12 underlying profit, reflecting a year when it lurched from one crisis to another.

Photo: Superdry

"Despite the backdrop, the Superdry brand remains strong and I am encouraged by the potential for our 2013 ranges," Chief Executive Julian Dunkerton said on Thursday.

The firm, whose clothes are a favourite of celebrities such as David Beckham, Ed Sheeran and Pippa Middleton, said on Thursday underlying profit before tax was 42.8 million pounds in the year to April 29.

That was in line with company guidance of about 43 million pounds but down from 50.2 million pounds in the 2010-11 year.

In April SuperGroup lost over a third of its market value after its third profit warning in a year, attributed in part to "arithmetic errors".

That setback followed stock availability issues in spring 2011 and the botched implementation of a warehouse IT system upgrade last autumn that left stores short of stock.

The litany of mistakes and four consecutive quarters of declining sales growth led some analysts to label SuperGroup shares uninvestable.

The shares have lost 62 percent of their value over the last year. They closed on Wednesday at 351 pence, valuing the business at about 274 million pounds.

During the year sales of the firm's trademark T-shirts, hooded tops, check shirts and jogging bottoms rose 32 percent to 313.8 million pounds, while gross margin increased 120 basis points.

SuperGroup added that it has signed an exclusive long-term franchise agreement with a unit of Reliance Industries, the largest private sector company in India, to launch the Superdry brand in that country.

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