Mini-Case Is Strengthening the Superdry Brand a Foundation to Strategic Success?

British-based SuperGroup, owner of Superdry and its carefully banded 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.

Sources: About SuperGroup, 2015, SuperGroupPLC.com, www.supergroup.co.uk, April 5; S. Chaudhuri, 2015, Superdry brand works to iron out problems, Wall Street Journal Online, www.wsj.com, April 15; S. Chaudhuri, 2015, Superdry looks to U.S. to drive growth, Wall Street Journal Online, www.wsj.com, March 26; H. Mann, 2015, SuperGroup strategy oozes Hollywood glamour, Interactive Investor, www.iii.co.uk, March 26; A. Monaghan & S. Butler, 2015, Superdry signs up Idris Elba, The Guardian Online, www.theguardian.com, March 26; A. Petroff, 2015, Is this the worst CFO ever? CNNMoney, www.money.cnn.com, February 25.

Case Discussion 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?