Fashion chief launches review of Superdry owner

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Former Co-op boss Euan Sutherland has launched a shake-up of fashion business SuperGroup after half-year profits plunged by nearly a third.

Mr Sutherland said he was reviewing every aspect of the group - which owns the Superdry brand - less than two months after taking over as chief executive, and had already identified areas of improvement.

It is the latest corporate turnaround to be initiated by Mr Sutherland, who walked out of the Co-operative Group earlier this year claiming it was “ungovernable” after meeting resistance to his reform plans.

He took over at Cheltenham-based Supergroup in late October and one of his first tasks was to warn that full-year profits would be lower than expected, at £60-£65m, after mild weather hit demand for warm winter clothes.

Results for the half-year to October 25 showed the scale of the task facing Mr Sutherland with underlying operating profits down 32 per cent to £12.1m, though reported pre-tax profits rose sharply due to the impact of one-off charges last year.

The group also warned that the additional stock clearance now needed meant that full-year profit margins would be flat - revised down from the 0.25 per cent improvement previously expected.

Mr Sutherland said: “SuperGroup is an exciting business with a strong brand and significant growth opportunities which, during this period, has suffered from widely publicised external factors.

“Additionally, I have identified that there are some parts of our operations that we can improve.

“I am reviewing every aspect of the business, including the execution of our strategy, cost management and capital allocation and will report our conclusions in the spring.”

Half-year results showed retail like-for-like sales down 4.1 per cent, with a brief upswing at the start of the second quarter wiped out by the impact of mild weather from mid-September through to November, the group said.

Wholesale revenue growth of 2 per cent was held back by a 10 per cent decline in the UK and Republic of Ireland.

The group said it remains on target to deliver full-year profits within its latest guidance - with the vast majority usually delivered in the second half.

The business has 151 stores including 97 in the UK and others in Europe. Shares fell 4 per cent.

Mr Sutherland’s arrival earlier this year saw SuperGroup’s co-founder and boss Julian Dunkerton move to a newly created role of product and brand director.

John Stephenson at Peel Hunt said SuperGroup delivered “a comforting performance” at a presentation for analysts yesterday morning, but added “there is more for the bears than the bulls” in the outlook for the company.