www.supergroup.co.uk

i see no logic at all in buying into uk retailers, whether high street or on-line - that applies equally to ASC and NXT as well as SGP - it's just pissing against the wind

ITS ALL ABOUT TIME ING, INIT.

indeed, but i think the timing is "not now"!

Timing.

You may or may not have heard of SuperGroup . It is a clothes retailer whose main brand is Superdry, a fashion label that combines faux Japanese lettering and vintage Americana fabrics and has been the height of cool in the past few years.

Back in the spring of 2010, SuperGroup shares were launched in an IPO at a price of £5. The shares then proceeded to rocket to £18 in early 2011 as the company's high-growth model was flavour of the month.

But the business has endured a torrid time over the past year. In May 2011 shares slumped because the retailer failed to get enough summer clothing into their stores as the UK went through a heatwave.

Then, in October of last year, SuperGroup had problems at a distribution warehouse, which resulted in shops getting too little stock and the wrong size stock. The total hit from this mistake was estimated at £9 million.

The net result of these gaffes was that the share price collapsed. From the peak of £18 in February of last year, the share price hit a low of 440p in November 2011. Quite simply, the short-sellers have had an absolute field day with this share.

But now that SuperGroup has been shorted to oblivion, it's worth taking a second look at the company. In my view, the fundamentals that made the firm so appealing a year ago still apply.

Still a great growth story

This is still a company with a strong brand, a brilliant design team and a great growth story. It aims to open 20 stores in the UK and 50 overseas in the financial year to April 2012. It is growing revenue and profit by around 40% a year.

The long-term goal is to have 150 stores in the UK; there are currently 80. Plus the scope for growth abroad is even greater -- already two thirds of sales are generated overseas, and I expect this proportion to increase. After all, the business is still to get a solid foothold in markets like China, the US and Germany. Suffice to say, there is a lot more growth to come from SuperGroup.

Admittedly, it is probably this rapid rate of growth which led to the warehousing difficulties. But SuperGroup is still a young company, and perhaps it is inevitable that it will have some teething problems. I am hopeful that these will be ironed out over time.

The brand isn't losing its lustre

But the real clincher for me came in the Christmas trading statement. Many SuperGroup bears have been saying that the fashion appeal of the retailer was bound to fade.

But I think the simplest proof about whether or not a brand or a company remains popular is like-for-like sales. And the Christmas trading statement said that like-for-like sales in December were up 9.3%. That is impressive, and is clear evidence that the Superdry brand is a long way from losing its lustre.

No wonder the share price has been rocketing recently. In the past six weeks it has risen a phenomenal 40%. And if you haven't jumped on board yet, I think the share price has further to go.

There are a couple of provisos. SuperGroup shares have a reputation for being volatile, so if you do get on board you should be prepared for a bumpy ride. Also, the firm needs to convince investors that it can manage its growth without making any more gaffes.

How do I sum up? Well, the current share price of 636p puts the company on a forward P/E multiple of just 11 -- and, remember, that is after the 40% rise. For a business that is growing at around 40% a year, that still looks cheap to me

There is only one Supergroup and that's Cream :-)

WHO ?

Right -

Cream were a 1960s British rock supergroup consisting of bassist/vocalist Jack Bruce, guitarist/vocalist Eric Clapton, and drummer Ginger Baker.

Sorry not to make you feel old skinny, bit before my time - :-)

Supertramp WERE good too.

Supergroup SGP.

Doesnt look very good from the technical
side. SP prices down to 450p may develop imo

Brokers already downgrading.......

BRIEF-RESEARCH ALERT-Merchant securities cuts Supergroup to sell
08 Feb 2012 - 08:19

Feb 8 (Reuters) - Supergroup PLC :

* Merchant securities cuts Supergroup to sell from hold


For a summary of rating actions and price target changes on European companies:

Reuters Eikon users, click on [RCH/EUROPE]

Reuters 3000Xtra users, double-click [RCH/EUROPE]

Are these downgrades, hold, and upgrades valuable.
Short term or long term?

Its a SELL rating ahoj.

Retail sales signal a tough year ahead, BRC says
Tue 07 Feb 2012

http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=19861715

i keep saying but i'll say it again ...... uk high street fashion retail should be avoided

Numis, however, remain sell and are happy to tell everyone.

BE
Supergroup has seen sales slow dramatically over the last 3 weeks, with the Q3
outturn implying LFLs of -3% through January, even against weaker comps. We
lower our Apr-12 PBT forecast from £54.1m to £49.0m and, with the stock trading on 15x earnings, reiterate our SELL recommendation.
BE
Sales slow in January: Having posted a Christmas trading update which saw LFLs
improve over the first 9 weeks of Q3 to +5.8% (+9.3% through December), Supergroup
has seen sales slow dramatically over the last 3 weeks of January. LFLs ended Q3 at
+4.4%, implying a run-rate of -3% since the Christmas trading update. Moreover, the
statement notes that the slowdown was only for the last 3 weeks of January, implying a
considerably worse exit rate, likely at least -5%.
BE
Against weaker comps: Strikingly, this performance is set against weaker comps; last
year, the slowdown from the 9 week Christmas sales growth to the 13 week Q3 update
implied this 4 week stub was facing comps c.10% below those over Christmas.
BE
There were mitigating factors: While we had expected sales growth to resume its
declining trend through 2012, we had not expected such a rapid change in trajectory.
Admittedly there are mitigating factors; this is a fairly insignificant period in terms of
sales, competitor clearance activity ran longer than last year and the warmer weather
didn’t suit Superdry’s product range. However, it is also worth pointing out that with
internet still growing, and international online sales included in the LFL number, the UK
store-based LFLs must have moved comfortably into double-digit negative LFL territory.
BE
(Wrong weather klaxon!)
BE
Brand increasingly mass market: In our view, the solid performance over the
Christmas peak, followed by a deeper trough during non-peak periods reflects the
continued mass-marketisation of the brand; Superdry is increasingly appealing to
customers who only shop twice a year – at Christmas and for a summer outfit.
BE
Forecasts lowered, reiterate SELL: Although Wholesale sales resumed its growth
trend (+59.2%), management has guided PBT to be towards the lower end of
expectations; we cut our earnings forecast from £54m to £49m. The shares now trade
on 15x and we reiterate our Sell recommendation, believing the brand has passed its
peak and expecting the sales trend will continue a negative trajectory through 2012.
BE
And that’s enough, I think.

Further update for Broker NUMIS and target SP

SuperGroup FTSE 250 Consumer, Cyclical Sell 450 584 -22.9% Numis Securities

Target SP 450p 22.9% downside.

Retail to run out of steam


Retailers have been among the biggest gainers on the stock market so far this year, after Christmas turned out to be not quite as dreadful as many expected, and economic reports from major economies suggest pre-Christmas fears of a global economic meltdown were misplaced.

Shares in the FTSE All-Share General Retail Index have climbed 11 per cent in the year to date - exactly the retail bounce we wrote about at the start of December. But it has been more troubled retailers like JJB and Game Group that have been the major beneficiaries rather than the more robust operators we suggested may have been unfairly dragged down in the retail sell-off at the end of last year.

And, although the latest figures from the British Retail Consortium pointed to a slowdown in January, analysts remain largely sanguine. "[The like-for-like fall of 0.3 per cent] is perhaps a bit worse than expected, but we are not sure that justifies the weeping and wailing," said retail expert Nick Bubb.

Meanwhile, Markit's Household Finance Index for January suggested that consumers were slightly more upbeat about their finances than they have been for some time. "The year has started with a few chinks of light for household finances, helped in no small part by a drop in inflationary pressures on the high street and recent news of energy price reductions,", said the group's senior economist Tim Moore, as its statistics showed the deterioration in household finances had slowed to its lowest rate in 13 months.

Even so, there are clear signs that, along with the icy weather, the retail market is starting to freeze over once again. Fashion retailer SuperGroup warned that its profits this year would be at the lower end of expectations, after a substantial drop off in sales in the last three weeks of January, effectively a profit warning for a group that has serious growth expectations to live up to. That follows a warning from another clothing retailer, French Connection , last Friday, which brought to an abrupt end the 60 per cent gain its shares saw in the preceding month.

And, although lower inflation may be lightening consumer mood, it is not encouraging them to spend - nor, it seems, is the promotional activity that boosted Christmas trading and remains, according to Mastercard Spending Pulse, at elevated levels. Analyst Simon Irwin at broker Liberum believes consumers remain worried about job security and are choosing to pay off debt rather than spend. "We see little potential for consumption to increase meaningfully [in 2012]," he said, also noting that the sector remains dogged with structural issues.

So, while we still think it's worth hanging onto stronger retailers, and dipping into their shares on weakness with a long-term view, we'd be inclined to take advantage of gains elsewhere, since little has fundamentally changed.