The recession took a heavy toll on retailers, with both high street brands and luxury labels struggling to keep their heads above water. However, with the economy slowly recovering, many of these firms are now experiencing a welcome return to form as consumers begin to spend once more.
One brand which had a particularly hard time was Superdry, whose parent firm SuperGroup was forced to post a string of profit warnings thanks to the consumer apathy hitting the high street. Fortunately, the company has this week been able to post significantly more positive results, which it has put down to the success of its internet shopping site and careful investment in international expansion.
SuperGroup reported an increase of 22 per cent in annual pre-tax profits in the year to April, while revenues climbed by 15 per cent to £360 million. This is in stark contrast to the 2011-2012 financial year when issues with the IT system and a miscalculation in demand predictions caused huge financial issues for both the brand and its investors.
Part of Superdry’s success in the past year can be attributed to the growth of its internet business, in which sales increased by 28 per cent – they now account for 11 per cent of the brand’s overall revenues. Superdry launched 10 local language sites, the majority of which cater for European customers, so consumers from over 100 countries may now log on and make purchases.
However, commercial property expansion also played a key part in revenue growth. During the year, Superdry opened six new stores in the UK including a 16,000 sq ft flagship store in the new Leeds Trinity shopping centre, whilst a large-scale rebrand operation of its 20 Cult stores also increased its access to the country’s consumer pool.
In total, the brand increased its UK and European floor space by 13.8 per cent, meaning it now operates a total of 536,000 sq ft across the continent. Yet this will further increase in 2014, with plans in place to add a further 80,000 to 100,000 sq ft in the UK and Europe by the end of the financial year.
Adviser at Zolfo Cooper, Dan Coen, believes this return to profitability will continue for the group.
He says; “With ambitious international expansion plans, as well as increasing its online offering overseas, the retailer’s success does not look like it will be cooling off any time soon.”
With retailers once more managing to post healthy profits and footfall steadily increasing on the high street, it seems that consumer confidence is finally giving the UK’s fashion chains the break they desperately needed. And with many planning to expand in line with the economic upturn, perhaps this good fortune will be passed on to the still-high vacancy rates negatively affecting town centres across the country.
