China helps power Superdry sales
UK fashion house SuperGroup has reinforced the success of its 2015 turnaround strategy with a solid set of results for the last financial year.
Superdry sales rose 27 per cent to £752 million. The retailer’s investment in e-commerce and wholesale has proved fruitful, increasing by 35 per cent and 42.9 per cent respectively.
Approximately one third of growth from retail and wholesale channels came as a result of having a large natural currency hedge, with SuperGroup protected by its growing European business. However, the retailer’s underlying operating margin softened on last year, falling 0.7ppts to 11.9 per cent – a trend that Zoe Mills, retail analyst with GlobalData, expects to see continue in the 2018 fiscal year.
International store expansion in China, Europe and North America were also a key driver of growth, with SuperGroup surpassing 1 million sq ft of retail space in the second-half year following the opening of 125,000 sqft of owned space in 2017.
“SuperGroup is wise to focus on international expansion, given its existing UK physical presence and muted expansion opportunities; however investment in improving the in-store customer experience remains crucial in order to drive footfall and conversion, supporting like-for-like growth. Its next generation of trial stores, which better showcase the breadth of product range, will help to improve this – with swift UK-wide roll-out advisable,” said Mills.
The retailer’s collaboration with Idris Elba and its sportswear ranges are still proving successful following its launch in 2016.
“SuperGroup is well positioned to exploit the ongoing athleisure trend. A celebrity-endorsed womenswear range to complement its Idris Elba collection, providing it can find the right ambassador, would help soften the male centric persona of the Superdry brand and introduce a new female customer to its established but less recognised womenswear department.”