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LONDON, United Kingdom — As most British fashion retailers struggle against a backdrop of consumer uncertainty and mounting online competition, Superdry is one label standing out from the pack.
The British brand, created in 2003 and known for its Japanese-inspired graphics, has become as popular in New York as it is in London and on Thursday helped owner SuperGroup Plc report sales growth far ahead of most rivals, sending its shares up as much as 10 percent.
From humble beginnings in the English horse-racing town of Cheltenham, Superdry has grown to become an internationally-recognised label worn by the likes of David Beckham and singer Ed Sheeran. Its distinctive Japanese font has grabbed attention the world over, so much so that just over half of SuperGroup's 202 stores are now located outside its home market. Growth is supported by an online business which represents about a quarter of retail sales.
The 31 percent increase in first-half sales beat estimates and “demonstrates SuperGroup’s differentiation versus peers,” Michelle Wilson, an analyst at Berenberg, said in a note. Marks & Spencer Group Plc’s clothing sales have been in decline for five years, while discount chain Primark suffered a 2 percent same-store revenue drop in its most recent fiscal year.
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With a large proportion of sales coming from outside the UK, SuperGroup is also a beneficiary of sterling’s weakness following Britain’s vote to leave the European Union. Currency fluctuations accounted for about a third of the growth in first-half revenue, it said.
The company also said Thursday that full-year profit will be “in line with market expectations,” though that’s probably conservative, said Canaccord Genuity analyst David Jeary, who raised his pretax profit estimate by £1 million to £85 million ($106 million).
SuperGroup additionally announced that retail revenue gained 25 percent, or 13 percent on a like-for-like basis, wholesale revenue increased 44 percent, the company opened 12 new stores, all outside the UK. First-half pretax profit will be in range of £20-22 million.
By Paul Jarvis; editor: Matthew Boyle.
