Supergroup hails deal as a 'game changer'

SuperGroup, the retailer behind the Superdry fashion brand, said a deal worth up to 40m euros (£33.7m) to buy out CNC Collections, its European franchisee, was a "game changer".

"It opens up huge possibilities for us ... It transforms our prospects in Europe," said chief executive Julian Dunkerton.

SuperGroup said it was buying its Benelux and France franchise and distribution partner from owner Luc Clement.

Mr Clement will join SuperGroup, whose clothes are worn by celebrities such as David Beckham, Leonardo DiCaprio and Zac Efron, as head of European franchising to spearhead a push into Italy, Spain and Germany.

"Luc Clement is delivering spectacular growth and he has really pioneered for us the perfect franchise formula in Europe. By buying his company we capture that growth within our company," said Mr Dunkerton.

"It allows us now to potentially open our own stores in major shopping centres across Europe, we need that hand holding to assist us."

The group opened its largest Superdry store in Sheffield's Meadowhall shopping centre last year, at 6,300 sq ft. It also has a site in Leeds.

It has also opened a Cult Clothing store at St Stephen's shopping centre in Hull.

SuperGroup said it expected CNC's sales to exceed 40m euros and its profit to increase about 8m in the first year of owner- ship.

Following the deal the group also expected to maintain a net positive cash position.

The company was one of 2010's most successful stock market flotations, listing at 500p in March and hitting a high of 1,660p in December. Analysts said it was significant Mr Clement was taking most of his consideration in SuperGroup shares, reflecting his confidence in the stock.

SuperGroup is paying Clement 7m euros cash and 21m euros, or 1.16 million shares, in stock.

A further payment of 12m euros in shares is subject to performance over the next three years.