Investors desert SuperGroup after fashion retailer's sales growth falls short of expectations
SuperGroup, the high-flying company behind the Superdry fashion label, had its wings clipped when almost £300m was wiped off its market value after quarterly sales fell short of expectations.
Its neon lumberjack shirts and hoodies have enabled the Cheltenham-based company to build an army of young followers, but investors took fright after its breakneck sales growth slowed to 61% for the last three months – a marked drop from the 87% seen in the previous quarter. The shares lost more than a fifth of their value to close down 355p at £12.19.
SuperGroup was one of the most successful stock market listings of last year, with the shares hitting a high of £18.99 after listing at 500p.
Arden analyst Nick Bubb said it was the company's "second PR disaster" in six months after a bungled warning about the possible impact of the high cotton price on its profit margins, but added: "I don't think this is evidence the brand has lost its mojo."
Julian Dunkerton, chief executive and founder, said the slowdown was a "blip". It had not opened as many UK stores as planned and the hot weather had also caught it by surprise. He said: "We had too many hoods and jackets and not enough flip-flops and shorts. It won't happen again."
Dunkerton batted away any suggestion that the popularity of Superdry, like FCUK before it, had started to wane and confidently predicted sales could climb from nearly £240m today to over £1bn as it pushes into new markets like China.
Bubb, who remains a fan of the stock, said it was "hard to reconcile" the swings in performance between the quarters and was concerned about a "lack of visibility" on the retailer's underlying sales momentum. "This is a young company that only floated just over a year ago and management are still learning how to communicate with the City, but it is obvious that it can't afford a third PR disaster," he said.