Su­perdry feels the heat long af­ter sum­mer slump

And now de­parted co-founder Ju­lian Dunker­ton is kick­ing up a stink as poor re­sults loom, writes Shane Hickey

The Observer - - Business & Cash -

There is at least some­one look­ing for­ward to win­ter. The man­age­ment at Su­perdry, the re­tailer that has be­come syn­ony­mous with mul­ti­ple zips and Ja­panese char­ac­ters, blamed the warm weather this sum­mer for its muted fi­nan­cial per­for­mance as peo­ple be­came hes­i­tant to spend on new, snug jack­ets while the sun con­tin­ued to shine.

This week the com­pany an­nounces in­terim re­sults, hav­ing al­ready is­sued a profit warn­ing that prompted a drop in the price of shares in Oc­to­ber. Last month it said that while win­ter had come to some mar­kets, there had been no “sus­tained pe­riod of sea­son­ally typ­i­cal weather”. Mean­while, Ju­lian Dunker­ton, one of the com­pany’s founders, has emerged from the wings to make it known that he thinks things are go­ing in the wrong di­rec­tion and that he should be brought back into the fold, hav­ing re­signed from the board in May to look af­ter his other in­ter­ests.

Not a man short of self-con­fi­dence, he has de­clared him­self “prob­a­bly the most ex­pe­ri­enced hu­man be­ing in this in­dus­try in this coun­try as we know it”, and has met the com­pany’s chair­man, Peter Bam­ford, as well as in­sti­tu­tional in­vestors in an ef­fort to re­turn in some ca­pac­ity.

Su­perdry has warned that win­ter has not come soon enough for it this year. Sweat­shirts and jack­ets ac­count for 45% of its an­nual sales, so warm weather in the UK, on the east coast of the US and in con­ti­nen­tal Europe has been a prob­lem. In or­der to re­duce the re­liance on out­er­wear, the com­pany is try­ing to sell more dresses, skirts, women’s tops and denim, as well as tap­ping into the ath­leisure trend by open­ing a hand­ful of stores that only sell sports­wear.

In ad­di­tion to the weather, the com­pany said dif­fi­cult con­di­tions on Bri­tish high streets would re­duce prof­its to the end of April 2019 by £10m. It also warned that its hedg­ing against cur­rency move­ments had not worked out as ex­pected, lead­ing to £8m in ad­di­tional costs.

All this has led to frus­tra­tion from Dunker­ton, re­ported to hold about 18% of the com­pany’s shares, who has said Su­perdry is suf­fer­ing from a “se­ri­ous lack of knowl­edge”. “I’m not go­ing to go away, there’s too much at stake,” he has said.

He cre­ated the brand with the de­signer James Holder in Cheltenham 15 years ago. It shot to promi­nence when David Beck­ham wore one of its “Osaka 6” logo T-shirts on the cover of his 2005 cal­en­dar.

An­a­lysts say that the prob­lems with the weather mean that the com­pany must now work hard to gen­er­ate rev­enues from its core mar­ket of jack­ets and sweats through the cur­rent peak trad­ing time. Oth­ers be­lieve there could be more prob­lems be­yond the weather, how­ever.

Emily Salter, a re­tail an­a­lyst at Glob­alData, says that although the heat­wave has been blamed for Su­perdry’s poor per­for­mance, “its growth has been slow­ing year-onyear, sig­nalling a longer-term is­sue be­yond these fac­tors.

“The re­tailer’s prices are at the higher end of the mid-mar­ket, which may alien­ate many po­ten­tial cus­tomers, es­pe­cially as many trend-led cloth­ing re­tail­ers now sell ath­leisure and sports cloth­ing at lower prices, in­clud­ing H&M, Asos and Top­shop.”

This will be a busy week for Dunker­ton. He will also be fo­cused on West­min­ster on Tues­day, when the vote on Theresa May’s Brexit deal is sched­uled. In Au­gust, Dunker­ton gave £1m to the Peo­ple’s Vote cam­paign, which is calling for a ref­er­en­dum on the fi­nal Brexit deal, and has said that if the UK had left the EU 20 years ear­lier his brand would never have been a suc­cess.

Dunker­ton has emerged from the wings to make it known he thinks things are go­ing in the wrong di­rec­tion

Rex

Dunker­ton says he is ‘prob­a­bly the most ex­pe­ri­enced hu­man be­ing in this in­dus­try in this coun­try as we know it.’

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