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Superdry: Has it reached its peak?

You can hardly walk along any high street without spotting Superdry product, from T-shirts emblazoned with Japanese logos to colourful hoodies and checked lumberjack shirts.

Surely this is what every brand longs for – is it not a retailers dream to have a brand teenagers and 40 year old men alike are clamouring to get their hands on?

However with success also comes intense scrutiny and every move by the brand and retailer is now watched eagerly by the company’s shareholders with speculation as to when and if the label has reached its peak.

Over the last couple of years young fashion brand Superdry, founded by Julian Dunkerton in 2003, has seen immense success as the label’s utility look hit the mark perfectly. In the past nine years Superdry has grown incrementally ploughing its product into 75 UK concessions and rapidly increasing its presence across the high street with 65 UK stores.

This growth has naturally generated a boost in sales. In the year ended 1 May 2011 parent company SuperGroup generated sales of £237.9m, underlying profit before tax of £50.2m with net cash at the yearend of £32.2m.

However it has not been a bed of roses for the public listed company and some suggest that the brand may have saturated the market making it less desirable.

The brand and retailer has also come under heavy fire from its stockists with criticisms about deliveries over Christmas 2010 and some stockists complaining that product design has stagnated. New IT systems at its warehouse caused further problems last year.

The latest chapter has seen SuperGroup facing regulatory investigation following its “arithmetic error”. The company issued a shock profit warning earlier this month after uncovering maths errors in its forecasting. SuperGroup said it would have to cut its full-year pre-tax profit by £7.5m because of the error - where a plus sign was entered rather than a minus. This news in turn led to its shares crashing by nearly 40%.

With shareholders keeping a careful watch over the future of the brand and other suggesting it has reached its peak could this be time for another young fashion brand to step up to take Superdry’s crown?

Victoria Gallagher, News Reporter, Drapers
victoria.gallagher@emap.com

Readers' comments (6)

  • What I'd like to know is why they continually sell product on the eBay store at below w/sale. For example, I've bought a hoodie for £20 which retails at £60. Some days their whole range is there and you can see the numbers sold which is always interesting.

    The obvious answer would be to clear stock but what at what price for the brand and their stockist sell thrus? How many of their consumers and stockists are without an Ebay account ? How shortsighted is this and with the profits they have is it really necessary? Surely there are better options than plastering your brand all over eBay.

    Superdry is not for me but the quality of their garments is excellent and at £20 a hoodie you can't go wrong. .

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  • What I'd like to know is why they continually sell product on the eBay store at below w/sale. For example, I've bought a hoodie for £20 which retails at £60. Some days their whole range is there and you can see the numbers sold which is always interesting.

    The obvious answer would be to clear stock but what at what price for the brand and their stockist sell thrus? How many of their consumers and stockists are without an Ebay account ? How shortsighted is this and with the profits they have is it really necessary? Surely there are better options than plastering your brand all over eBay.

    Superdry is not for me but the quality of their garments is excellent and at £20 a hoodie you can't go wrong. .

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  • I am a Superdry stockiest and the brand is really frustrating me at the moment. The wholesale prices to the independent are all wrong. I noticed the other day when i received stock off them and checked it on their own website they where selling all their higher priced t-shirt's for £24.99. When we the independent have to charge between £28 and £30 for the same T-shirts if we are to sell them for the recommended mark up set by them. One women’s t-shirt i have just received is on their site for £22.99 and i have to charge £29.99 for it. We can’t compete and the profit margin is way too low. I contacted Superdry about this and asked if they where going to credit me for the difference, they said they are aware of the problem but it does not look like i am going to be credited which is wrong. They said they are going to rectify this for AW12 but that does not help me now.

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  • They said the same to me last season,superdry like G Star and Diesel are now available on the Next website,Littlewoods,
    Very,Mainline etc etc Greedy

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  • if you can not make a margin don't buy the brand end of conversation stop moaning!!

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  • Superdry is a brand that got too big, too quickly but hasn't got the professional business acumen that is required to keep the brand credible, therefore it still retains the 'market trader philosophy'.

    If you're an Indie and having problems with margin, then drop it and move on to something else that can work for you. In five years time Superdry won't even exist, at least in its current form, so we'll only be moaning about another brand that can't get it's act together.

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