SEPGY Superdry PLC (PK)

U.K. fashion retailer SuperGroup PLC (SGP.LN) failed to calm market jitters about its growth trajectory Monday, as its shares took another steep slide amid concerns about over-exposure of its brand and stagnant growth in the U.K.

Despite reporting retail sales growth of around 39% in the first seven weeks of the fiscal year, the same level as in the fourth quarter, investors had hoped for an acceleration in the U.K., after even fourth quarter growth was deemed short of analysts' lofty forecasts.

Shares in the company, which counts celebrity favorite SuperDry among its brands, have almost halved in value since SuperGroup announced underwhelming fourth quarter U.K. sales figures in May, and Monday lost a further 7.22% or 65 pence to 835 pence by 0834 GMT.

In a statement ahead of an investor day Monday, the company sought to allay fears about its U.K. growth rate and store opening program, confirming widespread reports that it is opening a flagship store on London's Regent Street and reiterating its annual target of opening 20 new stores.

Still, the store program could be weighted to the second half according to Collins Stewart analyst Wayne Brown, who said his chief concern is that "consensus forecasts are predicated on a faultless execution of an aggressive development programme of 20-25 new stores per annum".

Supergroup's track record in store openings is somewhat tarnished however, because the company blamed some of the fourth quarter earnings miss on fewer than anticipated store openings in the period.

"With increased variability in lead times and differences in expected sales contributions from site to site, the shares are likely to be volatile between quarterly updates," Brown said in a note to clients.

SuperGroup said despite sales currently at fourth quarter levels, the past three weeks have seen a marked improvement in trade, although this implies May trading was weak.

Last month SuperGroup issued a 20% off in-store voucher to all of its online customers, spooking investors who were already fretting that the brand is being undervalued by over exposure and too much promotion.

But Numis analyst James Dilks-Hopper said only 5000 of the vouchers were redeemed suggesting "a minimal impact on sales."

Brand and Design Director James Holder will be presenting to analysts Monday and Dilks-Hopper said analysts will be hoping the company will decide to tone down its branding. Currently its clothes prominently display SuperGroup's main logos, and Dilks-Hopper said some brand subtlety would be well-received.

SuperGroup's clothing, particularly its eponymous SuperDry label, is worn by celebrities like David Beckham and Jude Law and has built up an exclusive cachet that has made it one of the most desirable premium casualwear ranges on the high street.

But fickle fashion has claimed its fair share of trendy brands, like French Connection Group PLC's (FCCN.LN) FCUK brand which fell out of favour several years ago, and the over-exposure of the Burberry PLC (BRBY.LN) brand in the early noughties which took several years to rebuild.

Still, SuperGroup said international growth is "strong" and trading is in line with group expectations.

By Kathy Gordon, Dow Jones Newswires; 44-207-842-9293; kathy.gordon@dowjones.com

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