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15 December 2011 |
Clothing retailer SuperGroup's half-year
profits have been hit by rising cotton prices and increased distribution
According to the UK
group’s interim results for the period which ended on 30 October, underlying
operating profit showed a decline of £500,000 to £13 million compared with the
same period in 2010. The drop was partly attributed to an increase to cotton
prices. The report said there had been a “reduction in [operating] margin of up
to 2 per cent for the full year driven by cotton price increases”.
SuperGroup has 72 Cult
and Superdry retail stores in the UK and 74 concession sites. Cotton cost rises
were partly offset by increasing the price of some clothing ranges. In a
statement the company said input costs are expected to “ease in future years as
cotton prices reduce”.
It also paid
additional distribution costs following technical issues associated with
installing a warehouse management system. Although most of the technical
problems with its UK distribution centre were resolved at the end of November,
the group had problems replenishing stock in its UK retail outlets with
incorrect stock requirements in most stores and incomplete size ranges.
The August appointment of the head of sourcing Shaun Packe, who previously led a purchasing team at
Asda, has helped the group address its supply base requirements.
The company said it
has increased its first tier supply base, with 53 vendors compared with 47 at
the end of 2010.