Is SuperGroup more than a fad?

Supergroup, the owner of the in-demand fashion brand Superdry, divides opinion. Its detractors claim its best days are behind it, that it has lost its fashionability and that more dads are seen wearing it than the kids that it is aimed at.

Its supporters see longevity in the brand, with great scope for overseas expansion as it capitalises on its on-trend status.

It is almost two years since SuperGroup – famed for its printed T-shirts and hoodies – floated, and its shares peaked at a stonking £18.20 last year. But distribution mishaps in the autumn sent shares on the slide after boss Julian Dunkerton admitted that between £6m to £9m of full-year profit would be wiped off as a result.

It began to look as if the retailer was not set up to cope with the aggressive expansion plans it had embarked upon. But while last year was somewhat rocky, this year has started well for the retailer, and analysts will be looking for the trend to continue as it updates on its third quarter next week.

SuperGroup is addressing its supply issues head on, and is moving to a new distribution centre in Brockworth, Gloucester to improve efficiencies and also aid expansion  – the new centre has the capacity for the retailer to expand its operations twice over.

More good news came this year from its Christmas trading update. Like-for-like sales were up 5.8% in the nine weeks to January 1, surging 9.3% in December alone.

Clearly there is still appetite for the brand.

Bank of America Merrill Lynch analyst Aurelie Caspar is undoubtedly a fan. She highlights the rising awareness of its differentiated brand, its “compelling” growth story domestically and overseas, as well as its strong online offer and attractive valuation. It is not just a fad, she insists, and it has not reached a saturation point.

There are, it seems, more fashion-conscious youngsters – and their parents – to aim for.