The pressure is on Superdry to prove it’s not the next French Connection.

It’s a great story of entrepreneurship, its products are really comfortable, and its shopfits are great. But I’ve always been bearish when it comes to the Superdry story, never more so than now. Here are some reasons why:

  • It’s over-exposed. It’s opening stores in towns it shouldn’t be going into - Basildon and Woking are two examples - led by landlords’ incentives (which will of course at some point expire). Look at Abercrombie and how it has made its London flagship a real destination by not opening stores on every high street. It wouldn’t be the same if it had a store in Basildon’s Eastgate Centre.
  • By the same token, too many people are wearing it. I remember flying home from a skiing holiday last year and it seemed like half the plane was wearing a Superdry hoodie. Once people see everyone else wearing the same as them, they want to move on to something else.
  • It’s expensive. The quality of the product is great but even so, it’s hard to charge such a premium when the brand has become so ubiquitous
  • You can buy Superdry from the Next Directory. No offence to Next, but it isn’t very cool
  • I own some. I’m 35 and not very fashionable. I can however vouch that Superdry joggers and hoodies are very comfortable
  • All the photos of the bloke accused of arranging the killing of his wife in South Africa feature him wearing Superdry. That’s not very cool.

Ok, so the last couple are flippant, but you get the idea. Today’s trading update isn’t bad at all - most retailers would kill for total sales up 71% during the year - but what’s really spooked the City - and prompted the shares to fall 22.5% so far today - is that this meteoric growth rate has slowed to 39% in the retail business in the fourth quarter. The company attributes this to supply issues and fewer store openings in the quarter, but analyst Numis reckons it implies a double-digit like-for-like decline in UK stores in the quarter.

Certainly it’s been surprising to see tweets from Superdry about Sales on its website - traditionally it has never discounted - and the challenge for founder Julian Dunkerton and his management team - as well as becoming better at managing the City’s expectations - is to prove Superdry isn’t a one-trick pony. The web and international growth provide real opportunities, but will be no good if the brand falls out of favour at home. Which is why Supergroup needs to demonstrate that Superdry can evolve as a brand and not get stuck in the same rut as French Connection did with FCUK.