British tend to hate a success story, so the news yesterday of Supergroup’s supply problems and expected profit hit was inevitably met with we-told-you-so themed musings on the danger of rapid growth.
Chief executive Julian Dunkerton’s attempts to reassure investors seem to have fallen on deaf ears – shares closed at just 707p yesterday, losing almost 30 per cent in just one session.
With Supergroup shares hitting a £18 high in February this year the drop is a disaster for those who have only recently jumped on the bandwagon – those that bought during Dunkerton’s bullish months of unstoppable sales rises and talk of international growth.
But for those in it from the start the news is less drastic. Despite yesterday’s dramatic drop, the price is still well above the 500p per share it listed at in March 2010. The success story isn’t over just yet.
But much of the shares’ future upside will be dependent on the Supergroup international growth plan, and supply chain problems at home are hardly a vote of confidence for a company looking at global deals.
Even at home the warehouse glitch could hit expansion plans, with between eight and twelve new stores scheduled to be opened in the second half, including a flagship on Regent Street.
Dunkerton has said he expects the creases to be ironed out by November, and says he has “absolute confidence in the company and the brand”.
Fighting talk, but it might just take investors a little longer to get back to business as usual.