Collaboration with Idris Elba and buyout of US license contribute to SuperGroup recovery
4 min read
06 May 2015
SuperGroup revenues have increased by 18.4 per cent to £134.8m – due in large part to CEO Euan Sutherland's plans of "broadening the appeal" of the brand, including using Luther and The Wire actor Idris Elba as the new face of its Superdry label.
SuperGroup’s share price dropped as founder Julian Dunkerton stepped down in October 2014 and COO Susan Given resigned in February 2015. The stock market reacted with a four per cent drop in share price. Sutherland declared the company “ungovernable”.
“When I joined there were questions around the longevity of the brand after some periods of negative like-for-like sales,” said Sutherland. However he suggested that SuperGroup was “strongly positioned” to “stretch” to new customers.
Although it won’t “move away from core customers”, Sutherland intends to target an older audience.
Actor Idris Elba has been asked to help design the Autumn/Winter 2015 season collection with designer James Holder. Elba will also become the face of the campaign.
Sutherland said he hoped Elba’s profile would relaunch the Superdry brand in the US, where it had a “difficult start”.
Superdry “still appeals to the 18- to 24-year-old market”, Sutherland claimed, but added that many shoppers had “grown up with the brand” and Elba would appeal to that older generation as well.
“He epitomises what we are: British, grounded and cool,” said Sutherland.
SuperGroup has also bought back its distribution rights in North America – for £22.3m –after terminating a 30-year licence agreement with its US partner.
Read more about SuperGroup:
- SuperGroup suffers share price drop after COO’s sudden resignation
- 5 CEOs who were demoted down the ranks
- Superdry founder steps down to focus on brand image
“Strategically, taking control of our product and presence in North America is an important and natural step in realising our ambition to create a global business,” Sutherland said. “It gives us the opportunity to enhance our brand presence there and significantly build the long term value of our business.”
SuperGroup’s US business made a £5.1m loss in 2014. Sutherland blamed the US licensee for failing to expand. He suggested management could “now reduce losses very quickly” over the next two years. Sutherland plans to halve losses this financial year and turn a profit in 2017.
To appeal to investors the company has announced it’s first dividend payment – due in the financial year to April 2016 – which will look to be covered “3.5 times over”. Analysts at broker Peel Hunt predict an annual dividend of up to 23p a share next year.
Sutherland has also added Penny Hughes to the board as independent non-executive director. She currently holds the same role at Morrisons and Royal Bank of Scotland and has retail experience with Home Retail Group, Gap, Next and the Body Shop.
The business has continued to extend the reach of the Superdry brand. Sales from 243 store openings contributed 11.9 per cent growth. Sutherland also opened 29 franchise stores during the year. He claimed that the ecommerce customer proposition continued to strengthen, with revenues growing by 39.5 per cent over the year.
He said: “[SuperGroup] traded robustly throughout the final quarter. Our focus remains on the creation of a global lifestyle brand, through the extension of the Superdry brand and execution of clear retail growth opportunities, under-pinned by continued investment to strengthen our business. A strong pipeline of new stores in our targeted European markets, ecommerce momentum, the acquisition to take control of our brand in North America and the opportunity to increase awareness through our global collaboration with Idris Elba provide confidence for continued growth.”
Analysts expect an underlying profit outcome at between £60m and £65m, he added.