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09 Sep | Supergroup – New Highs Following Optimistic Interims

After you’ve bought a new car it’s amazing how often you’ll spot the exact same make and model on the streets. Obviously, roughly the same numbers were sharing the tarmac the day before, but that realisation often doesn’t come until you’re an owner of that same model yourself.

Lately I’m finding the same case can be made for clothing. Since first investing in Supergroup back in 2012 I’m noticing a lot more of their leading brand, Superdry, being sported by the young and fashionable – in my little nook of Europe at least.

Not content with just being a shareholder, I decided to sample their range myself, forking out for a couple of t-shirts. And the verdict? I’m sold. Now I’m no Giorgio Armani but they appear to be a quality-made product and they fit very well. Obviously time will tell on how well they wear.

It’s certainly added an element to their investment case. But there’s more to Supergroup than a well made range of fashion.

Following the 5th September release of their interim management statement – covering the quarter to 28th July 2013 – Supergroup’s share price added a further 100 pence in the ensuing days, pushing new two-year highs above 1,200 pence per share.

It’s been a big 12 months for the High Street fashion retailer having more than doubled its share price, on the back of an energetic expansion into Europe, the Middle East and Asia.

In the 13 week period just reported SuperGroup’s portfolio of franchised locations increased by a further 12 stores to 154 stores globally. Franchised stores begun trading in France, Italy, Spain, India, Austria, Monaco, The Philippines, Thailand and Taiwan.

Given the companies stated plans to open between 40 and 60 new stores per annum, this level of footprint growth is not a one-off but the norm for a company intent on pushing its brand to the world.

supergroup-1-year

I doesn’t take a finance degree in London to understand the chart above represents a fine return to form for Supergroup. The figures below suggest that that growth may well continue into 2014.

In its most recent interim statement, Supergroup announced that total retail sales for the quarter were up 17.6% to £53.2m in comparison with the same period last year. Whilst total group sales increased 25.7% to £75.0m in what was described as, “a solid trading performance that was in line with management expectations.”

They’re obviously some hefty management expectations. Never a bad thing, especially when they’re being met or surpassed.

The report went on to state that wholesale sales for the period were £21.8m, up an impressive 50.8% on the prior year, however, they went on to add that a better indicator of underlying wholesale performance could be taken from the autumn/winter 2013 order book which showed growth of 26% on last year. A healthy set of numbers however they’re dissected.

I’ll leave the final word to Julian Dunkerton, CEO of Supergroup who had this to say in the latest interim management statement:

“We have started the year in fine form and have continued to build momentum in both the Retail and Wholesale divisions. The spring/summer 2013 ranges have performed well across all channels with further progress made in womenswear. I am particularly pleased with the strong growth in the autumn/winter order book which demonstrates further evidence of the continued improvement in our ranges and the enduring appeal of our brand.”

Thanks again for dropping by.

Paul
rsvp@investorsoiree.co.uk