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Superdry gets upgrade as broker impressed by new clothing designs


Superdry PLC (LON:SDRY) shares are “priced to fail” but the retailer’s new clothing ranges have impressed broker Peel Hunt sufficiently to upgrade its recommendation and hike its target price.

After stumbling upon one of the clothing retailer’s “reset” stores, analyst John Stevenson said was impressed by new ranges and improved merchandising that was “a significant step-up in what has come before”.

Results last month showed revenue slipped 27% in the 20 weeks to September 12, as performance in August and September worsened.

With Superdry having become the uniform of ‘dads and undercover policemen’, returned boss Julian Dunkerton said that the group is now looking to “return to a design-led philosophy” as part of his turnaround plan.

Stevenson said it seemed little different to the common ‘wait until you see next season’ narrative that is familiar for clothing retailers looking to turn things around, where often the top 5% of the product pyramid looks great for press shows but never quite cuts through into the stores or beyond the website landing page.

“This time we have seen the start of the transition process cut through at store level, across the website imagery and, most importantly, into next season, or at least a good look into autumn/winter 2021, and we believe it delivers on the promises set out at the recent results presentation and genuinely moves the brand forward in product terms to more than a label.”

All parts of the clothing range “have moved the collection on”, with the branding on the sophisticated & minimal range “so minimal as to be virtually invisible”, while the core knitwear and jackets “offer a price/quality mix that puts the brand ahead of the competition”.

The expertise of creative director Phil Dickinson combined with Dunkerton’s brand and product direction “looks set to allow the brand to attack different areas of the market across multiple channels and multiple areas of wholesale,” the analyst said.

Reassured by a balance sheet showing net cash, Peel Hunt’s recommendation was lifted to ‘add’ from ‘hold’, with the share price target upped to 200p from 175p.

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