SUPERDRY owner SuperGroup has admitted the problems that triggered a 14.7% fall in profits were mainly self-inflicted.
The group said it “should have done better” after a year blighted by an accountancy blunder and being caught out with stock shortages as it struggled to keep up with its rapid rate of expansion.
It opened 19 new stores in the UK and Ireland during the year, bringing the total to 79, but will slow its expansion this year as it seeks to grow “in a controlled and measured way”.
Underlying profits fell to £42.8m in the year to April 29, but the group denied its brand was in decline and recent trading had been broadly in-line with expectations despite being affected by the weather.
SuperGroup’s shares have lost more than half of their value from peaks in early 2011 amid fears that the brand was losing its edge.
However, the stock rose 18% yesterday amid relief that the group had spared investors more nasty surprises after a catalogue of errors over the past year. Chief executive Julian Dunkerton, who founded the group in 1985 from a market stall in Cheltenham, said: “While sales have continued to grow substantially, this has been a disappointing year for the group.
“We have faced challenges brought about by the rapid growth of our business, which have been compounded by the volatile and adverse market conditions being experienced by all fashion retailers.”
But he added he was “encouraged” by the potential for 2013 ranges and said 20 of its Cult stores would be rebranded as Superdry, reflecting the continued strength of the brand.
The group has more than doubled revenues over the past two years to £313.8m, including 32% growth over the last financial year.
SuperGroup, which also operates the SurfCo California brand, nearly doubled the number of overseas franchised and licensed stores to 101 last year, with openings in Finland, Switzerland, Hong Kong and Taiwan.
But it admitted it had got its communications with the City wrong after an arithmetic error contributed to a recent embarrassing revision of its profits forecasts for the year.
It has strengthened its management team by appointing Shaun Wills as chief financial officer, who has started a review of the finance department, while it has also appointed John Lewis’s fashion chief Susanne Given as chief operating officer.
Chairman Peter Bamford said: “While the tough economic environment has not helped, our problems have been largely self-inflicted. Keeping pace with this level of growth would always have been a challenge, but we should have done better.”