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UPDATE: SuperGroup Bolsters Management Team To Accelerate Expansion(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - Fashion retailer SuperGroup PLC Wednesday said it has appointed Non-Executive Director Euan Sutherland as its new chief executive, with founder Julian Dunkerton moving to the newly created role of founder and product and brand director, a move they said would assist an accelerated expansion overseas. The company said the change will allow Dunkerton, along with designer James Holder, to focus on developing its product ranges and "enhancing and protecting the brand" as it expands round the world. "Really it's about the complexity of the business, where we are moving to, and the growth ambitions of the business," Dunkerton told Alliance News Wednesday, adding that the new role will leave him focused entirely on driving the business in terms of product, retail and on a creative basis. "The product and the range will benefit massively from my 100% commitment to it, and working incredibly closely with James, and Euan delivering the strategic growth that we have laid out for this business," he added. Sutherland was CEO of the Co-op Group from 2013 to 2014, leading the recapitalisation of the Co-op Bank after it got into financial difficulties. He was previously head of Kingfisher UK, overseeing the company's B&Q, Screwfix and TradePoint units, and was rewarded with promotion to group chief operating officer at Kingfisher PLC. He was head of Superdrug owner AS Watson UK between 2004 and 2008, and previously held senior positions at Mars, Coca-Cola, Dixons and Matalan. "It's about strengthening what is already a very strong management team here," said Sutherland. Dunkerton and Sutherland told Alliance News that it will now accelerate expansion overseas, as well as its product ranges.Its major focus for own-store expansion within mainland Europe is Germany. "We will be opening another three stores in Germany before the close of the current year - one in Hamburg and two in Frankfurt," said Dunkerton. Earlier this year, the company took control of its agency operations in Germany, a move it said at the time will improve wholesale margins in the future, and speed up the pace of its store roll-out programme in Germany. The company also bought-out its Spanish agency. In the medium term, Dunkerton and Sutherland said the group will look to expand in bigger markets like the US and Asia, two markets they see as key growth opportunities for the business "We have a global opportunity. We have a core market in the UK and very strong expansion into Europe, but we are looking beyond that. In broad terms markets in Asia and in the US," said Sutherland, who said it would be the next five- to 10-year phase for SuperGroup. Last month, SuperGroup said it remained on track to deliver profitable growth in the full year as it posted a rise in group revenue in the first quarter of its fiscal year, with positive performances from its wholesale and retail arms and a gradual improvement in like-for-like retail sales against strong comparatives. First quarter group revenue hit GBP87 million, up 16% from the GBP75.1 million posted a year earlier. In the fourth quarter of its last financial year, it said sales were hit by the promotional environment in the UK retail sector. Management didn't comment on current trading Wednesday, but said that the current strength of sterling is certainly "unhelpful". In recent months, UK clothing retailers have blamed the strength of the British pound for pushing up the prices they have to charge for their goods abroad, holding back growth in those markets. "With European pricing, the strength of the British pound is not particularly helpful. It's not a massive issue, but it never helps," said Dunkerton. Sutherland will be paid a base salary of GBP675,000 a year as CEO, and will get an annual bonus of between nothing and 150% of salary depending on performance. Up to 100% will be paid in cash and the rest via a restricted share plan vesting over three years. He will also get a performance share plan award on appointment equivalent to three times annual salary, subject to performance and continued employment at the end of a three year performance and vesting period. He'll also get further annual awards of up to the equivalent of two times annual salary, under similar performance conditions, the company said, adding that all the bonuses are subject to malus and clawback provisions. Dunkerton and a former business partner founded Cult Clothing in 1985, and in 2003 he joined forces with designer James Holder, who had previously created the Bench brand, to create Superdry, SuperGroup's own clothing brand. SuperGroup shares were trading 3% lower Wednesday morning at 991.50 pence, although Sutherland said investors have taken the news of the management shift as quite positive. Investec cut its price target on SuperGroup by 4% Wednesday, to take account of the effect of the recent warm UK weather on clothing sales, but said it is keeping its Buy recommendation on the stock in the wake of a management reshuffle that has impressed the asset manager as well as its longer-term prospects. "Euan has a formidable retail reputation and a wealth of experience," said Investec analyst Kate Kalvert, adding that the ex-CEO will be focusing on what he does best and the management shuffle "gives insight into the board's thinking on the future brand opportunity as it internationalises." In its research note, Investec said that the need to cut earnings forecasts slightly due to the warm weather is "frustrating", but that it is not a SuperGroup specific issue and ultimately the strong longer-term opportunity that the stock offers is not reflected in its current valuation. By Rowena Harris-Doughty and Steve McGrath; [email protected]; @rharrisdoughty; [email protected]; @stevemcgrath1 Copyright 2014 Alliance News Limited. All Rights Reserved. |