Fashion retailer SuperGroup's (SGP) revival continues, sentiment buoyed by a tie-up to access the vast Chinese market. Alongside a positive current trading update, the news sends shares in the Superdry brand owner up another 3.4% to £12.83 on Thursday.
Click here to read the full-year results statement from Cheltenham-headquartered SuperGroup. This reveals modest 2% growth in underlying pre-tax profit to £63.2 million, held back by a tough first half that was followed by a far better second. CEO Euan Sutherland confirms the strong momentum seen in the second half is being maintained. Retail like-for-like sales are up 20.3% for the ten weeks ended 4 July, albeit against a very soft prior year comparative.
A business with grand global growth designs, the past year has seen SuperGroup further build Superdry globally through ongoing owned store expansion in Europe and the buy-back of its US licence in March. Today, the retailer and wholesaler confirms whispers in the weekend press by announcing a ten-year minimum 50:50 joint venture in China with local retailer Trendy International Group.
The joint venture will be funded via a combined investment of up to £18 million and management anticipates it will be self-funding within two years. Trendy will run the stores day-to-day, with SuperGroup providing brand support, design services and marketing.
The Chinese tie-up marks the culmination of a protracted process to find the right partner to develop Superdry in China, forecast to overtake the US as the biggest apparel and footwear market in the world. 'Customer tastes are evolving from luxury brands to brands influenced by “pop” culture,' says SuperGroup, 'and we believe that the Superdry brand, with the right product, pricing model and infrastructure, is well positioned to be successful.'
SuperGroup is putting its strong balance sheet and copious cash generation to work, having acquired its US licence and announced it will begin paying dividends in the financial year to April 2016. Hopes are also high for a new premium clothing range collaboration with Golden Globe winning actor Idris Elba (pictured above), which launches later this year.