Superdry – A compelling strategy and investment case
Superdry, the Global Digital Brand, is a diversified and uniquely advantaged business, with world-leading capabilities and a strong and consistent track record of both financial and strategy delivery. Our clear brand positioning is centred on creating amazing clothes through an obsession with design, quality and fit and is underpinned by Relentless Innovation and a commitment to Operational Excellence in everything we do. We have a compelling vision for growth to capture the clear World Market Opportunity we see ahead, with our proven expertise in each of the brands eight routes to market, creating a disruptive multi-channel approach. Our management team has deep experience across brand, online, wholesale, retail and marketing while the ongoing involvement of our founders means we have retained our entrepreneurial edge.
Superdry’s Strategic Framework to deliver sustainable growth with high returns
Global Digital Brand
Superdry is a globally recognised brand, with consistent consumer perceptions and a clear brand essence. This is epitomised by our brand purpose: We create the clothes – our consumers create the stories. Our consumers are loyal and global perceptions are consistent, showing that our brand is seen as quality, stylish, cool and trendy. We have an exciting digital strategy to provide a market leading experience in all of our channels while also deepening our engagement with our consumers.
Innovation is at the heart of Superdry and in everything we do. We have wide and continually developing ranges, with more than 5,000 styles updated each year, that provide consumers with items for all occasions, and own our core product categories provide unrivalled breadth and choice with, for example, over 500 jacket options. We also use our SuperDesignLab as a hot house for accelerated innovation. We have a passion for continual improvement, tailoring our approach to each new market and the speed and efficiency in which we serve our global consumers.
World Market Opportunity
Our market is the digital and physical world, with a clear role for the brand from each channel and a huge future opportunity. Superdry is already present in 148 countries with every market representing a further growth opportunity, with the USA and China being two significant development markets that remain untapped. Both our wholesale and ecommerce channels are flexible and capital light, ready to take advantage of opportunities as they arise, particularly within the fast growing on-line market that resonates with Superdry consumers, and our future growth will favour these channels. In addition the payback on our owned stores located in large, influential catchments are already sector leading and there is still room to improve this as we grow our owned store portfolio in a disciplined way.
At Superdry we work every day to create the most efficient and effective operating model to support our global growth ambitions, based on a foundation of best in breed systems, global distribution and improved people capability established over the past three years. We are now well placed to develop a global harmonised range, with a goal of doubling the range overlap by the end of FY19, further increase direct sourcing and a single integrated stock pool each of which will lower working capital and our cost to serve.
At Superdry we have delivered consistent double digit sales and profit growth. The business is highly cash generative with a strong balance sheet and we organically fund our growth to drive superior returns from all channels.
Over the last three years, we have delivered 25% CAGR revenue growth, 20% CAGR earnings growth and 25% ROCE. Since FY12 we have invested £240m in the business and delivered 80% cash conversion after funding the expansion in our working capital. Furthermore, we are cash positive with low lease adjusted gearing enabling a progressive dividend policy and a commitment to returning excess capital to shareholders.
Super Responsible 40
Sustainability lies at the heart of the Superdry brand values, and remains front of mind in the design and production of our high-quality products. Against that backdrop, we have three stretching corporate responsibility goals, to be delivered by 2040 - the Super Responsible 40: