Despite the Japanese letters in its logo, Supergroup doesn’t actually have a physical presence in Asia. That’s all set to change though thanks to a joint venture announced today with the amusingly named Trendy International Group, a Chinese clothes retailer - whose logo also mixes Asian and Latin letters.
International JVs are rather on trend at the moment, as businesses eager to expand overseas look to minimise their risk of losing lots of cash. Dixons Carphone announced plans to launch a chain of stores in the US with mobile network Sprint last week and Thomas Cook signed a deal with the giant conglomerate Fosun to launch in China in June.
The new company will be headquartered in Guanzhou, a megacity near Hong Kong, and it plans to open the first store within a year. The move is part of a broader plan by the brand to expand its international presence – it reclaimed ownership of its US franchise in May and continues to open more stores in mainland Europe.
‘The joint venture in China with Trendy International Group, announced today, together with an extensive pipeline of new stores in our targeted European markets and continued momentum in e-commerce, provides confidence of continued long-term growth,’ said its chief executive Euan Sutherland in a rather wordy statement.
The announcement coincided with Supergroup’s final results at the end of a mixed year for the business, which was forced to issue a profit warning in October. Sutherland joined in the same month and in March set out his plans to get the company back on track – including a partnership with super-cool actor Idris Elba.
In the year to 25 April Supergroup’s revenues were up 12.9% to £486.6m, delivering underlying pre-tax profits of £63.2m, a small improvement on the previous year. Things were looking even stronger in the first quarter of this year – total retail sales in the 10 weeks to 4 July were up to £60.8m, a 34.2% increase on last year.
That strong performance sent its shares up 3.71% to 1,287p this morning, some way off their peak back in 2011 but a massive improvement on six months ago. Is there anything Idris Elba can’t do?