SuperGroup cuts back expansion

Fashion retailer SuperGroup is to scale back on store expansion this year after “largely self-inflicted” mistakes saw the company’s profits tumble by 15%.

Peter Bamford, the chairman of the group behind the Superdry and Cult clothing brands, said it had been a “difficult” year, adding that the group’s “communications with the City have proved to be challenging”.

This reflected it issuing three profit warnings last year, which SuperGroup blamed on a botched upgrade of its warehouse systems in the autumn, fierce discounting by rivals and accounting errors.

Its underlying profits tumbled by 14.7% to £42.8 million over the year to April 29, although a rapid store-opening programme in the UK and overseas drove a 31.9% uplift in revenues to £313.8 million. However, underlying UK sales at stores open at least a year only grew by 2%, including online revenues.

The fashion retailer, which floated at 500p in March 2010, opened 124,000 square feet of new space, including its new flagship store on London’s Regent Street, in the UK and Ireland during 2011-12. But it only plans to add about 70,000 of sq ft this financial year.

Julian Dunkerton, SuperGroup’s chief executive, said: “The reality is that the retail landscape has changed in the last few years.”

The reduction in its store expansion programme helped SuperGroup’s shares advance by 57.3p, or 17%, to 392p today.

This continued its roller-coaster ride since flotation that has seen the shares rise as high as 1820p and as low as 264.5p.