Superdry-owner Supergroup's shares hit by cost fears
- 15 December 2010
- From the section Business
Supergroup, the firm behind the Superdry fashion brand, has seen its share price drop 11% on worries over rising costs.
It follows a comment in its interim report that the firm was concerned by rising global cotton prices.
However, Supergroup said revenues rose 65% in the six months to 31 October, with pre-tax profits up 86% to £14.6m.
Prior to the drop, the retailer had tripled its market value since floating on the London Stock Exchange in March.
"Our growth is nothing short of spectacular," said chief executive Julian Dunkerton speaking to the Reuters news agency.
And he described the impact of rising cotton prices on profit margins in autumn as "a tiny blip".
The company noted its concern about cotton prices for the first time in its interim results released on Wednesday, echoing fears expressed by fellow UK clothes retailers Next and Primark.
Supergroup's retail sales business saw rapid growth - up 72%, including a 140% rise in online sales.
The retailer continued to expand, increasing its store-count by 31% to 55, and its concessions by 23% to 69.
The new stores and concessions opened in the past six months include Harrods, the Lakeside shopping centre in Essex, and One New Change by St Paul's Cathedral - reflecting the diverse customer appeal of the company's brands.
Meanwhile, Supergroup continued an aggressive overseas expansion policy, according to its interim report, including new stores in South Korea, the United Arab Emirates and Venezuela, as well as new German- and French-language websites.
Its wholesale division - which sells Superdry branded groups to other retailers internationally - saw sales rise 56%.
The board decided not to commence paying a dividend, reflecting the fact that the company still considers itself very much a growth stock.