SuperGroup revenues increase 12.9 percent, inks JV to enter Chinese market

SuperGroup, owner of the Superdry brand, along with its results for full year for 2015, also provided a trading update for the first 10 weeks of the current financial year and a joint venture with Trendy International Group to access the Chinese market. Group revenue for the year rose by 12.9 percent to 486.6 million pounds (748.5 million dollars), with revenue from newly opened and maturing retail space contributing 8.2 percent of this growth.

The Group has maintained the sales momentum achieved in the second half of the last financial year reflecting continued store opening programme. Total retail revenues in the 10 week period increased by 34.5 percent year on year, with retail like-for-like sales growth of over 20.3 percent.

The group’s gross margin rose 120 basis points to 60.9 percent, reflecting the benefit of business acquisitions, sourcing and pricing gains, partially offset by a focused promotional programme designed to drive customer footfall during key trading periods and to reduce surplus inventory. Group’s underlying operating margin declined by 120 basis points on last year to 13.1 percent. The decline on a full year basis reflects the 330bps decline in the first half driven by significantly reduced sales volumes in that period.

Elaborating on the company’s performance, Euan Sutherland, Chief Executive Officer, said, “Despite a challenging start to FY15, the past year has seen substantial progress in building Superdry globally with continued expansion of our owned retail presence in Europe and the buy-back of the US licence. The joint venture in China with Trendy International Group, announced today, together with an extensive pipeline of new stores in our targeted European markets and continued momentum in e-commerce, provides confidence of continued long-term growth.”

Reflecting the continued expansion of owned stores across the EU together with positive group retail like-for-like growth in the year of 4.8 percent, retail division revenue increased 17 percent on the year. The retail division now represents 69 percent of total group revenue and expanded presence through 28 store openings in eight countries, including eight in Germany. Group retail like-for-like sales were particularly fueled by a strong e-commerce performance. The retail division’s operating profit in FY15 was 62.6 million pounds (96.3 million dollars). Underlying operating profit in the year increased 13.9 percent and underlying operating profit margin was 18.7 percent.

Wholesale division revenue went up 4.9 percent, representing 31 percent of total group revenue. At the end of the year the group had wholesale operations in 69 countries through 212 Superdry branded franchise stores and nine licensed stores. Revenue growth in wholesale was achieved mainly through territories outside Europe (rest of world) and clearance channels. Revenues within the UK were adversely impacted by the failure of a key customer, while revenues within Europe were reduced by the strengthening of sterling against the Euro. The rest of world has seen an increase in orders through the existing franchise partnership base opening new stores and the addition of new partnership deals.