Fashion retailer SuperGroup admitted it can’t count today when it blamed “arithmetic errors” in its wholesale business for contributing to another calamitous profit warning.
Chas Howes, outgoing finance director at the owner of the Superdry brand, discovered a plus rather than a minus figure in the forecasts for the wholesale business, which was a key reason for the retailer warning of a shortfall of about £8 million in its full-year profits.
SuperGroup’s third profit warning since October sent its shares plummeting to an all-time low and dealt a further body blow to its credibility with the City, with independent analyst Nick Bubb describing it as a “calamity”.
It has been a rollercoaster ride for SuperGroup, whose chief executive is Julian Dunkerton, since it floated at 500p in March 2010. Its shares, which peaked last year at 1820p, today plummeted by 234.73p, or 41.2%, to 334.78p, wiping £175 million off the firm’s value.
SuperGroup explained there have been “arithmetic errors in our forecast of the wholesale business amounting to some £2.5 million”. Its wholesale business is largely its franchise operation overseas.
The company declined to comment today on whether Howes will remain at SuperGroup after he steps down from the board on Monday, as it stated when it unveiled his successor, Shaun Wills, last month.
When Wills, the former chief operating officer at Habitat, joins next week he will have to quickly start whipping its questionable financial reporting processes into shape. SuperGroup also provided a series of other reasons why it now expects profits of £43 million for the year to April 29, instead of the £51 million analysts had forecast.
In a highly unusual statement for a listed retailer, SuperGroup said that its “wholesale business is multi-dimensional, experiencing high growth levels and, given our rapid expansion and lack of history, it is difficult to predict accurately”.