British-based SuperGroup, owner of Superdry and its
carefully branded product lines, is taking actions to deal
with recent performance problems. These problems
manifested themselves in various ways, including the
need for the firm to issue three profit warnings in one
six-month period and a 34 percent decline in the price
of its stock in 2014 compared to 2013.
Founded in 1985, the firm is recognized as a distinctive,
branded fashion retailer selling quality clothing
and accessories. In fact, the firm says that “the
Superdry brand is at the heart of the business.” The
brand is targeted to discerning customers who seek
to purchase “stylish clothing that is uniquely designed
and well made.” In this sense, the company believes
that its men’s and women’s products have “wide appeal,
capturing elements of ‘urban’ and ‘streetwear’ designs
with subtle combinations of vintage Americana,
Japanese imagery, and British tailoring, all with strong
attention to detail.” Thus, the firm’s brand is critical
to the image it conveys with its historical target
customer—teens and those in their early twenties.
Those leading SuperGroup believe that customers love
the Superdry products as well as the “theatre and
personality” of the stores in which they are sold. These
outcomes are important given the company’s intention
of providing customers with “personalized shopping
experiences that enhance the brand rather than just
selling clothes.”
As noted above, problems have affected the firm’s
performance. What the firm wants to do, of course,
is correct the problems before the Superdry brand is
damaged. Management turmoil is one of the firm’s
problems. In January of 2015, the CEO abruptly left.
Almost simultaneously, the CFO was suspended for filing
for personal bankruptcy, and the Chief Operating
Officer left to explore other options. Some analysts
believe that the firm’s growth had been ill-conceived,
signaling the possibility of ineffective strategic decisions
on the part of the firm’s upper-level leaders. As
one analyst said: “The issue with SuperGroup is that
they’ve expanded too quickly, without the supporting
infrastructure.”
Efforts are now underway to address these problems.
In particular, those now leading SuperGroup intend
to better control the firm as a means of protecting the
value of its brand. A new CEO has been appointed who
believes that “the business is very much more in control”
today than has been the case recently. A well-regarded
interim CFO has been appointed, and the firm’s board
has been strengthened by added experienced individuals.
Commenting about these changes, an observer said
that SuperGroup has “moved from an owner
entrepreneurial style of management to a more
professional and experienced type of management. The
key thing is, it is much better now than it was.”
Direct actions are also being taken to enhance the
Superdry brand. The appointment of Idris Elba, actor
from The Wire, is seen as a major attempt to reignite
the brand’s image. In fact, SuperGroup says that
Elba epitomizes what the Superdry brand is—British,
grounded, and cool. The thinking here, too, is that
Elba, who at the time of his selection was 42, would
appeal to the customer who was “growing up” with the
Superdry brand. For these customers, who are 25 and
older, SuperGroup is developing Superdry products
with less dramatic presentations of the brand’s well
known
large logos. Additional lines of clothing, for skiing
and rugby for example, are being developed for the
more mature Superdry customer. After correcting the
recently encountered problems, SuperGroup intends
to expand into additional markets, including China. In
every instance though, the firm will protect the brand
when entering new competitive arenas and will rely on
it as the foundation for intended success.
Questions
1. What influences from the external environment over the
next several years do you think might affect SuperDry’s
ability to compete?
2. Does Superdry have one or more capabilities that are
valuable, rare, costly to imitate, and nonsubstitutable? If
so, what are they? If not, on which criteria do they fall
short?
3. Will the actions that Superdry is taking solve its
problems? Why or why not?
4. What value does Superdry create for its customers?
5. What actions would you recommend the management
of Superdry take to resolve its problems and turn around
the performance of the firm?