Now that’s what I call a trading statement. SuperGroup I mean. In the same week as M&S reported retail Armageddon and online sales barely moving, SuperGroup today said the half year to October 29 saw group revenues up 31.1% to £334m and its online sales soared 25%.
Its retail revenue was up 25% too, reaching £215.2m, while wholesale revenues were up an astonishing 43.8% to £118.8m and comparable sales rose 12.8%. OK, that latter figure was certainly not as good as the 17.2% of a year ago but hey, these are tough times.
Wow. So what did SuperGroup do right that so many other firms are doing wrong?
Well, the simple answer is made lots of appealing product at the right price with the right marketing behind it. But the company that owns the Superdry brand didn’t fore up that explanation, Instead it said the results reflected its global footprint and that revenues benefitted from sterling’s weakness with the impact of currency changes accounting for around a third of the reported growth in each of the operating divisions.
Yet even if you ignore those currency effects and say the growth should have been two-thirds of what it actually was, it’s still very impressive.
I like the fact that e-commerce soared 25% too. M&S only managed 0.3% and other big names like Next couldn’t match SuperGroup’s surge either. The company is clearly getting it right here but doesn’t appear to be cannibalising its physical store sales in the process.
And the wholesale leap looked good too, especially in a world where so many higher-end brands are retreating from wholesale as if it was somehow a bit too downmarket for them.
Was there any bad news? The gross margin in the period is expected to decline year-on-year by around 130bps, primarily reflecting the “strong participation of relatively lower margin wholesale sales.” OK, we know that the aforementioned retreat from wholesale by many luxury brands is as much about margins as it is about controlling the brand image, but lower down the price food chain SuperGroup still seems to be able to cope with those lower margins and is making wholesale work.
It’s making its stores work too. At a time when many are cutting back on openings, the company opened a further 12 owned stores and increased the brand’s average retail space by 19% year-on-year.