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UPDATE - Idris Elba and divi to drive SuperGroup recovery, but £22mln US hit hurts

‘The Wire’ actor is to design a premium line of clothing to help establish presence in US as part of new boss Euan Sutherland's revival strategy.

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--adds broker comment, updates share price--

SuperGroup (LON:SGP) will take control of its US operation and pay dividends next year, new boss Euan Sutherland said as he unveiled his recovery plan for the fashion retailer.

It will cost £22.3mln to buy back exclusive rights in North America, but the former Co-Op boss said this was crucial to build the Superdry brand’s US presence.

The US business lost £5.1mln in 2014, but Sutherland now expects it to be profitable by 2017.

"Currently Superdry is not well known in the US; the wholesale and retail proposition is based on a high-low pricing model and the general ‘pitch’ of the brand is wrong," said broker Peel Hunt, which reckons US is a major opportunity for the firm.

But Sutherland's message is one of a slow and considered approach – getting the brand positioned in the best way, growing online and securing the most appropriate wholesale channels.

He took charge in October after SuperGroup was badly caught out by unseasonably warm weather and almost immediately launched a strategic review.

Today, he said the group would make pre-tax profits of £60-65mln for the 2014-15 year, in line with previous guidance.

In an another move to beef up the brand, ‘The Wire’ actor Idris Elba is to collaborate with Superdry and design a premium line of clothing.

"Today we are setting out our strategy to deliver sustainable growth at SuperGroup, as we continue progressing towards our goal of creating a global lifestyle brand,” he said.

Sutherland’s plans include broadening the brand’s appeal, investing in staff and systems, extending the product range and entering new markets.

He also announced that Penny Hughes, who joined the board of RBS in 2010, has been appointed as non-executive director.

"Euan’s ‘Embedding, Enabling, Extending and Executing’ 4 pillar strategy points to upside from better execution across the company and seems to support our view that there’s a major medium-term opportunity to maximise UK profitability," said broker Investec.  

"We continue to believe SGP capable of delivering sustainable double-digit growth."

Shares in SuperGroup were up 5.6% near the midday mark, 53p higher at 986p. 

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Price: 141.6 GBX

LSE:SDRY
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Market Cap: £116.15 m
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