SGP is a fashion retailer:
It focuses on the youth fashion market with its clothing and accessories for both men and women.
It is – or should I say was – considered a high-growth share.
It was floated in March 2010, and reached a high of around 1773p in Feb 2011. It plummeted 38% in today’s trading on account of:
There have been arithmetic errors in our forecast of the Wholesale business amounting to some £2.5m
This is a far cry from news on 12-Jan-2011:
Reuters reported that Supergroup PLC forecast fiscal 2011 profit at the upper end of expectations after posting a 90% increase in sales over the key Christmas period.
As Bloomberg noted today:
[SGP] fell the most ever in London trading after the owner of the Superdry brand lowered profit guidance for a third time in about six months
This is either a very good investment opportunity, or a complete value trap. The problem is, there seems to be a bit of a pattern here with new issues. CPP was a similarly disasterous investment, and was even suspended for awhile.
Although the "arithmetic error" was "only" £2.5m, one can’t help but wonder if there’s something much more worrying going on. Mr Market certainly seems to think so. He might be acting irrationally, but then, that’s only a might. I’d be very, very, careful with this one.
Will be interesting to see how it all pans out. My guess: avoid.
359p
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