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Feb 8, 2011
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SuperGroup firms on acquisition

By
Reuters
Published
Feb 8, 2011

Shares in fashion retailer SuperGroup gain 4.4 percent after the firm buys its Benelux and France franchise and distribution partner, CNC Collections, a move which Seymour Pierce says will be "significantly enhancing to earnings".

SuperGroup
SuperGroup's brand Superdry

SuperGroup, the company behind the Superdry brand, says it will pay up to 40 million euros ($55 million) for CNC, in a deal which should accelerate its international franchise roll out and enable it to operate owned larger-format stores in key locations across Europe.

Seymour Pierce lifts its 2011/2012 pretax profit forecast to 66.5 million pounds from 60 million pounds, taking EPS up by 8 percent to 63.4 pence from 58.5 pence.

"Following the upgrade, the stock is rated at 24.1 times 2011/2012 earnings and still looks undervalued relative to earnings growth forecast and peer ASOS," the broker says in a note.

Separately, Atif Latif of Guardian Stockbrokers calls the deal a "sound strategic acquisition."

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