Fashion retailer Supergroup said today that business has improved in recent weeks following a challenging second quarter caused primarily by major IT and warehouse problems.
A trading statement released by the owner of youth fashion brands, Superdry and Cult, revealed that since October 30th 2011 the company’s like-for-like (LFL) sales are positive and the group is well-prepared for the busy Christmas period.
The business said it is confident about trading as the festive season approaches, despite tough sales comparisons with the same period last year, while e-commerce development and operational improvements have positioned the company well for the 12 months ahead.
Supergroup’s positive forecasts come after it reported a £0.5 million fall in underlying profits to £13 million for the first half of its financial year.
On a more positive note, LFL sales for the 26-week period to the end of October were up four per cent year-on-year, while total retail revenue jumped 34 per cent to £73.1 million, aided by the opening of 12 new stores during that time.
Basic earnings per share for H1 totalled 18.4p, up from 11.3p at the same stage in 2010.
Profits and Q2 LFLs were heavily impacted by a previously reported glitch in its IT and warehousing system, which is expected to cost the business a total of £8.8 million over the course of the full-year period.
Today’s statement indicated that first-half, profits were reduced by an estimated £4 million as a result of one-off set-up costs for the temporary warehouse facilities, as well as other costs incurred while the business worked to resolve the issues. LFLs were down 3.3 per cent in Q2, with the supply chain problems impacting in-store stock levels.
Supergroup CEO Julian Dunkerton said: “In the last six months we have seen a challenging trading environment and have had to overcome some significant distribution issues within our retail division.
“Our replenishment capability in the UK business in now restored and our international and e-commerce businesses continue to show good growth as a result of strong demand for the Superdry brand.”
Revenue growth in the last few weeks, plans to open another eight stores in the UK by the end off April and continuing development of its e-commerce operation - both in the UK and internationally - will ensure Supergroup heads into 2012 in buoyant fashion.
Meanwhile, after the behind-the-scenes problems experienced earlier this year, a new look supply chain team has been working hard to resolve and develop the group’s support infrastructure, and further senior appointments are planned for the coming months.
Dunkerton added: “While the economic outlook remains very uncertain, I am confident in our strategy and ability to improve many operational aspects of our company to achieve further efficiency and to maximise the opportunity we have both in the UK and overseas.”