Stock problems at SuperDry hint at the problems of rapid growth

The share price of Super Group fell by 30% in just one day when management issued a warning to shareholders that profits will be well below expectations. Management blamed a new warehouse IT system which, they claimed, had left stores short of stock. They estimated that resulting loss of sales (customer demand, but no stock to sell) would knock £6m to £9m off its profit for 2011.

On the face of it, this sounds like a simple one-off technology problem. But is it? Might it be that SuperDry is expanding too rapidly (both in the UK and internationally?) A retail chain that grows so fast is bound to suffer operational problems. Not only do to the new retail outlets need computer processing facilities to link into the chain’s back-office systems; but a business like this needs the right number of experienced management to ensure that those stock control systems are working properly. Something, somewhere has broken down - with costly consequences. A great example to use in an exam answer or essay.

A broader strategic issue for SuperDry arising from their recent problems is examined here in the Independent. The SuperDry brand has been around for a while (since 1985) but it is only recently that the brand has moved from a distinct niche clothing segment to something more mainstream. As SuperDry becomes more popular, does it lose its appeal to the original customer segment?