BIO: Euan Sutherland became CEO of Supergroup in 2014. Prior to his current role, Sutherland was group chief executive officer at The Co-operative Group. Sutherland has more than 23 years’ experience within the retail sector and has worked at Boots, Dixons, Coca-Cola and Mars. COMPANY PROFILE: Superdry is a British clothing brand that combines vintage Americana with Japanese-inspired graphics and operates in 515 branded locations in 46 countries around the world. The brand’s parent c
ompany is Supergroup plc.
IRW: Superdry did really well over Christmas last year. What was the reasoning behind that?
ES: If you look at the calendar year, we’re about to finish our financial year at the end of April, so up to the level of published data at Christmas trading, we had plus 15 per cent like-for-likes and over 20 per cent total retail growth.
It’s a combination of things. There’s never a silver bullet in retail. We have a ‘4E’ pillar strategy (embed, enable, extend and execute) that lives in the business and is about the culture and how we organise ourselves. If you go through the strategy, there’s a lot of focus on understanding and improving a product, which is our connection with customers. Our founder Julian Dunkerton is absolutely obsessive about improving the product and how it’s in front of customers.
We’ve done a lot of work on our design to customer program, which is every point of interaction that we have from the idea appearing in our creative designer’s head to arriving on shelves. We’ve sped up parts of the wholesale business, we’ve invested in the e-commerce business in our front-end delivery, in how fast we get products to market and put it in front of customers. We think we have a world-class proposition in terms of home delivery and in our stores, we’ve innovated both in the visual merchandising and our new store format too.
You go through all of that, and the customer likes what they see, so they’re buying more. We’re absolutely paranoid about driving better proposition and growth. What was pleasing about the result was it was well-balanced in product category and geography. Womenswear is the fastest growing category for us, but in autumn, menswear caught up with that growth. If you look at the UK home business, the European part of our business, which is the major driver of growth, and the US – we saw growth in all those territories. It wasn’t one bit out-performing and the rest lagging.
Then finally between the stores, e-commerce and the channel split, e-commerce has amazing growth, but we saw growth in bricks-and-mortar sales and e-commerce. The balance around the business is what we look at a lot and I think that’s part of our paranoia.”
IRW: Can you tell me about your new store format?
ES: Our belief is we think customers love to shopping physically as well as online. Online is super convenient. We’re committed to delivering product to customers however they want to shop, whether it’s bricks-and-mortar or e-commerce. We have to make it as easy as possible for them.
It’s too easy for a retailer to say ‘Well, everyone’s going online, so I’ll let bricks-and-mortar business die slowly’. That’s not we do. We’ve invested in the long-term for bricks-and-mortar, so it’s our job to make our shops as interesting as possible, so that whatever footfall is on the high street, we get our fair share. There’s still footfall there. We walked down George Street and other malls in Sydney – it’s just amazing footfall.
There are customers there who can be persuaded to part with their money so we’ve got innovation in stores. Our new store format started in England in one of our existing like-for-like stores in Manchester last July. It was a really fair test, we felt.
We adopted a few simple principles – we removed the entire frontage of the store, because we felt old-fashioned store concepts can be a barrier for people who are entering. We took the frontage off most stores and, if the climate is okay, we’ve taken them off street stores as well – you physically open up the shop, making it easy for customers to literally step in.
We’ve worked on our density, to drive the most amount of customer choice. We said, ‘Okay, let’s get some new equipment, some real innovation and give customers as much choice as possible, but give them back some space so they can shop’.
We’ve done two other things that are really important – we’ve improved lighting and the music.
Music is an important part of our DNA. It’s always been loud, because there’s a whole energy about Superdry, which is underpinned by the playlist that we now sell to people – you can download it. But when you’re in-store and there’s loud music, it’s difficult for customers to talk to each other, so we invested in a digital WAV system, which are incredibly powerful loudspeakers that sit on the floor, not in the air. If you think about it in car terms, it’s like the most powerful American V8 huge car engine driven at about 30 miles an hour. You can get the same amplification and sound, but the WAV system is comes across at a low level, so if you’re standing and talking with your partner, you can still hear them, but you still get the atmosphere and DNA of the business.
We were quite a dark concept, so we’ve put more lighting in, but we’ve softened the glare. It’s the same wattage but a softer light, but there’s more of it. We try and pick up some of the key categories and highlight those, so it draws people through the store.
You put those things together and the stores look and feel different. The sales response has been amazing – there’s been between 25-30 per cent uplift consistently in a market that’s really tough to get store like-for-likes.
IRW: How do Superdry stores differ from city to city?
ES: The frontages in different markets are different. Even in parts of London, our home city, you see different representations of the brand. There are some strands of the brand’s DNA that flow through it.
There’s a lot of brand DNA that remains the same, but the shopping environment, size of store, frontages, tend to change. We don’t want to be like the cookie-cutter Gap store where it’s the same everywhere, but we want to be sympathetic to the building or environment that we’re in. Sydney is very different to London, LA and New York. If you take some of our German stores, we’ve refurbished the Kranzler Corner in Berlin, a very famous building. The Kranzler Cafe, which opened in 1834, is on top of the building, so we’ve reinstated that to be an exclusive coffee bar, which is performing out of its socks. People have to walk up through our store and up the original marble staircase that has been re-established and restored to its former glory.
IRW: What plans do you have for Superdry in Australia this year?
ES: It was our first time visiting Australia when we came to Sydney for Inside Retail Live in March. We spend a lot of time on the ground in different countries, seeing and feeling what’s going on. We have a great business in Australia. The guys have done a fantastic job of growing it to the size it is now.
We have big plans for growth in all three channels – our own stores, through to wholesale channels, like Myer and David Jones and e-commerce. We always want to have a multi-channel approach to the market and I think Australia lends itself to that. The brand feels like it’s good so far and we’d like to see slightly bigger stores as we go into the next phase so we can show more of our ranges. But we’re in a good space right now and the first new store format store in Australia will open in Chermside in Queensland in late May.
IRW: Superdry explored activewear a year ago. How’s that going now and what plans do you have for it in the future?
ES: It was natural evolution for us. If you look at some of the market data, the main line apparel market is still growing across the world, but if you look at athleisure and sport, it’s got a three times multiplier on it, so we thought, ‘Okay, it seems like there’s some interesting market opportunity there’.
Because we have a big market in sweats and graphic, we looked at the sport market. Our assessment was if you look at very famous brands like Adidas and Nike, there was space to add more design into that, which is where we thought our brand could play along.
It’s still early days. We tend to do things in a small and quiet way to start with, just to get some data. Activewear was the first category we tested in womenswear. It was our first capsule with only 28 options which sold incredibly well, so we thought, ‘Okay, there’s a natural demand’. We extended that to menswear last March, so we’re really in the early days of it and we think it’s complementary to our main line, so we’ll keep testing.
Athleisure is one bit of it, but we’ve moved to credible, technical sport and the leader for us has been our snow range. We’re in our third season of doing snow and it’s an incredibly, technical product. The product’s for skiers, but it’s a third of the price of the dedicated snow brands. We have the brand design but the affordability – it has to be amazing quality design and detail, but at a price that’s accessible for everyone. That’s the brand DNA that we’ve got.
IRW: How are retailers feeling post-Brexit?
ES: If we were a UK-only retailer, it would feel pretty stressful in the sector, there’s a period of uncertainty now. From a physical government point of view, that cascades into retail markets and into the fact that the FX moves were pretty sharp around the outcome of the referendum. That’s fed into prices, which has led to pretty steep inflation. And there’s the unknown of what that means for a business’ supply chain, store base and store costs.
Because we have internationalised the business significantly in the last three to four years, we’re less dependant on the UK base, so Brexit is less turbulent for us and we’ll continue to internationalise as quickly as we can. We still suffer from some of the input inflation, but we’re trying to offset that with our overall design to customer program. We’re not putting our prices up, because we want to offer the best value for money and we don’t believe the customer should be penalised. But I think for a UK-based retailer, it would be tough.
IRW: You’ve been in retail since 1992. How have customer expectations and shopping behaviour have changed?
ES: I think the customer is firmly in charge, they always were but they’re even more in charge now because of the access to data. They can walk into our shops and see our entire range on their phones. About 19 years ago, they couldn’t do that.
The customer is more demanding and will continue to get more demanding, which is a good thing in a way, because it means we’ve got to be sharp, every retailer has to be sharp. We don’t really look at our apparel competitors too much. We look at how we can be better for our customer, and that’s a multi-channel solution, so we’re obsessed with making it as easy as possible for customers to come to a shop, go online or shop with our partners, shop at a franchise store, or return products, give us feedback and do all that stuff. The provision of data and use of data is a topic everyone’s talking about here and we’ll keep investing in that.
The other side is our investment into physical stores. Retail is all about giving the best possible experience to customers, and that’s about the product, the people and the shop.
It’s about good old-fashioned retailing. As much as one side is about data and new technology, which is important, if the product and people in the shop are engaging, then I think we’ll win through.
It’s about keeping it simple and focusing on the things that matter. There’s lots of noise today and it’s about trying to be simple with that. We get the opportunity to sit on lots of planes around the world and those are quiet times to filter out what’s not important and focus on driving advantage.