Follow founder out of Superdry

Announcing a special dividend alongside the annual results at the start of July seems to offer some short-term support to the group’s shares. But the timing of Mr Dunkerton’s share sale following a near 20 per cent rally from lows reignited a number of investor concerns. Mr Dunkerton offloaded over a quarter of his stake in the group he co-founded with a 5.5m share placing at 1,285p organised by UBS and Investec, bagging £71m for himself in the process. The sale follows Mr Dunkerton's departure from his role as a brand director at the company in March this year to pursue his charity work and other interests. And while he continues to hold an 18.5 per cent stake in the business, the size of the disposal at a price well under this year's highs has put the market on edge.

A number of question exist about the group’s future. Operating margins have been under pressure for several years, not helped by the fact that the retail climate in the UK remains challenging and consumer confidence is low. And while management guides for operating margin expansion this year, the jury remains out given the experience of the last five years (see graph).

As well as operating margins, gross margins have been moving in the wrong direction since 2016. While some of this is down to strong sales growth at the lower-margin wholesale business, the group also attributed last year's gross margin fall from 60.2 per cent to 58.1 per cent to “expanded end of season clearance activity”. The need to resort to cut-price sales is another reason that Mr Dunkerton's departure and disposal look a potential concern. The worry is that Superdry may currently lack the brand vision necessary to support robust selling prices. Some analysts feel relatively little has been said recently of the product range itself – which is arguably odd when one considers the significant publicity that surrounded the high-profile collaboration with actor Idris Elba just a year or two ago.

Instead, the focus has shifted towards moving the group over to what management calls a "capital-light" model, which prioritises digital and wholesale channels, curbing physical expansion and converting some stores into ‘next-generation’ formats aimed at bettering the shopping experience and keeping costs down. While this makes sense given slower in-store sales and the need to support returns following margin weakness, success depends on the maintaining the brand's 'must-have' credentials.