SuperGroup gets forecasts wrong
Clothing retailer SuperGroup, the owner of the Superdry brand, said “arithmetic errors” in its forecasting led to a £2.5m shortfall in its wholesale business.
The Cheltenham-based group put out a trading update on 20 April marking its second profit warning of the year following a routine audit, which sent its shares plummeting.
It said: “The wholesale business is multi-dimensional, experiencing high growth levels and, given our rapid expansion and lack of history, it is difficult to predict accurately."
A spokesperson for SuperGroup told AccountingWEB that the error was "a simple human oversight" where a 'plus' sign was inserted rather than a 'minus' into the company accounts, and that it was not down to any software or forecasting slip ups.
Finance director Chas Howes stepped down from the board as of today (23 April), which was previously announced, along with the appointment of Shaun Wills as chief financial officer.
SuperGroup admitted to an additional £2m shortfall in the same division because of demand for its stock coming later than expected and an increase in operating costs.
A further £2m shortfall was caused by more shoppers buying goods on eBay or at discount outlets.
It also said there was confusion in the way stock was accounted for at the end of the financial year, which is now expected to be pushed into the 2012-13 year accounts.
Annual pre-tax profits will be £43m in the year to April 2012, compared with a forecast of £51m. Around £170m of the company's value was wiped on 20 April as shares crashed 38% to 351.8p.
It had already downgraded its forecast in February to around the £50m mark after blaming poor January sales, sparking fears that the profit growth in the brand was on the decline.
The group also issued a profit warning last October blaming the implementation of a warehouse IT system upgrade that left stores short of stock.
SuperGroup was founded in 1985 and hit the mainstream in 2004 with a shop in Covent Garden selling US vintage style clothing often with Japanese text. The website says the brand was: "Inspired by a trip to Tokyo in 2003, Superdry fuses design influences from Japanese graphics and vintage Americana, with the values of British tailoring."