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SuperGroup says brand "alive and well"
LONDON (Reuters) - The Superdry fashion brand is "alive and well" and has coped with recent poor weather, its founder said on Thursday, insisting he had learnt lessons from a string of profit warnings blamed on "arithmetic errors" and distribution problems.
Shares in parent company SuperGroup (SGP.L), down 62 percent over the last year, rose 16 percent on Thursday after it met forecasts with a 15 percent fall in year profit and said first quarter trading was in line with management expectations.
"The Superdry brand remains strong," Chief Executive Julian Dunkerton told Reuters of the label he founded and whose celebrity fans include David Beckham, Pippa Middleton, Ed Sheeran and Tulisa Contostavlos.
"We may have had operational difficulties (in 2011-12) but you have to look at the group revenue which is 32 percent up. This is really an indicator of where the brand is, the perception of the brand and the desire for the brand."
The firm made an underlying pretax profit of 42.8 million pounds ($66.6 million) in the year to April 29.
That was in line with company guidance of about 43 million pounds but down from 50.2 million pounds in the 2010-11 year.
"Today is an important first step in the onerous task of rebuilding management credibility, after the disasters of the last year or so," said independent retail analyst Nick Bubb.
During the year sales of the firm's trademark T-shirts, hooded tops, check shirts and jogging bottoms rose to 313.8 million pounds, while gross margin increased 120 basis points.
In April SuperGroup lost over a third of its market value after its third profit warning in a year, attributed in part to "arithmetic errors".
That setback followed stock availability issues in spring 2011 and the botched implementation of a warehouse IT system upgrade last autumn that left stores short of stock.
The litany of mistakes and four consecutive quarters of declining sales growth led some analysts to label SuperGroup shares uninvestable.
The stock, which floated at 500 pence in 2010 and reached a high of 1,899 pence in February last year, was up 55 pence at 391 pence at 0906 GMT, valuing the business at 318 million pounds.
"I'll hold my hands up. There is no doubt that over the last two years I have been busy learning how to become a public company," said Dunkerton.
But the April appointments of Susanne Given as chief operating officer and Shaun Wills as Chief Financial Officer had reduced his workload, enabling him to focus on product ranges.
He said he was encouraged by the potential of the 2013 ranges. "For me it's the best spring range we've done by a million miles."
The group currently trades from 103 standalone stores in the UK and Europe, along with 101 franchised and licensed stores globally.
For 2012-13 the SuperGroup is targeting 70,000-90,000 square feet of new standalone store space in the UK and Europe, along with a minimum of 30 franchise and license stores globally.
"For this year we're making sure we can deliver what we say in an effective controlled manner," said the CEO.
"But you have to remember we've grown 674 percent in four years."
SuperGroup also said it has signed a franchise deal with a unit of Reliance Industries (RELI.NS), the largest private sector company in India, to launch the Superdry brand in that country. Five stores will open before Christmas.
Talks to enter China continue.
($1 = 0.6426 British pounds)
(Editing by David Cowell and Mark Potter)
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