Superdry founder backs clothing retailer turnaround
The winds of change in fashion can change quickly, and brands that were once considered cool can quickly fall out of favor if not properly maintained.
Take Superdry, for example. It was a meteoric success story, with rapid sales growth following its IPO in 2010 as it emerged as a global player and by mid-past decade it comfortably outperformed the FTSE. All-Share.
A notable drop in its valuation began in 2018, when founder Julian Dunkerton stepped down following a disagreement with then-chief executive Euan Sutherland over his strategy. Following a fight for control, Dunkerton was reinstated as managing director in April 2019.
Things haven’t gone well since – Superdry recorded three years of losses on declining revenues. Last month it reported a 21% drop in sales for the year to April 30 of £ 556.1million, but pre-tax losses were reduced to £ 36.7million from £ 167million of pounds sterling a year earlier.
Revenue increased in the last quarter and Dunkerton argued that the company was on the road to recovery and the brand was evolving. Although its share price has risen by around 23% so far this year, Superdry remains undervalued on many parameters compared to its peers and Dunkerton is clearly confident about its outlook. He just spent nearly £ 1million to buy shares, raising his stake in the company to 20.7%.
Kingfisher bosses seek to capitalize on DIY boom
Customers of the Kingfisher retail group have spent significantly more money since the start of the pandemic to repair their key assets in hopes of making them better and more valuable. The management of the company did the same.
Managing Director Thierry Garnier, who was appointed in March last year, began a reorganization of his business strategy in September, which took into account everything from sourcing and product sourcing to pricing. and marketing. It has sought to reduce costs by using space more efficiently, by testing more compact stores and by, for example, introducing self-service payment terminals.
In the UK and Ireland, where the company generates more than half of its turnover, it has been helped by a booming home improvement market. The repair, maintenance and improvement industry is expected to grow 14.3% this year, according to the Construction Product Association’s fall forecast. Kingfisher outperformed, however, with sales in the UK and Ireland up around 30 percent and retail margins up 1.3 percent to 16.2 percent. In France, where it operates under the Castorama and Brico Dépôt brands, its sales increased by 20% and its retail profit margin widened to 5.3%.
The company expects to make an adjusted full-year profit of between £ 910 million and £ 950million (2020: £ 786million) and expects up to £ 200million in buybacks. Garnier and new CFO Bernard Bot have shown their confidence by buying £ 130,960 and £ 98,220 respectively of shares. At the end of last week, 1.8 percent of its shares were on loan to two short sellers. However, one of them – the European arm of hedge fund manager Citadel – appears to have unwound its position, meaning that figure has fallen to 1.3%. Kingfisher’s share price has risen 25% since the start of the year.