SuperGroup is stepping into China via a joint venture deal with Trendy International Group, a casual fashion company backed by LVMH, the luxury goods house that owns Louis Vuitton and Céline.
The company behind the fashion brand Superdry said it would invest £9m in the deal with TIG, which has around 3,000 stores across China including outlets for Italian brand Miss Sixty as well as its own labels Ochirly, Five Plus and Trendiano.
SuperGroup said it was entering the new market in a “controlled and managed way” and would not open the first stores until the middle of next year.
“China is a very exciting market and forecast to overtake the US as the largest apparel and footwear market in the world,” it said.
“Customer tastes are evolving from luxury brands to brands influenced by pop culture and we believe that the Superdry brand, with the right product, pricing model and infrastructure, is well positioned to be successful.”
The move into China comes after SuperGroup bought back exclusive rights to distribute the Superdry brand in the US, Canada and Mexico for £22.3m, and hired Luther and The Wire actor Idris Elba to help relaunch its brand across the Atlantic.
The deal ended a 30-year licence with a US partner which had delivered just 15 stores and last year made a £5m loss on £20m of sales.
SuperGroup also plans to expand in Europe, including Germany and Austria.
Kate Calvert, an analyst at Investec, welcomed the move saying the company not only had the potential to double its UK and European-owned store base but now had longer-term growth prospects in the US and China.
SuperGroup also revealed a 2% rise in underlying pretax profits to £63.2m in the year to 25 April. Sales rose 12.9% to £486.6m.
The company said trading in its new financial year had started well with like-for-like retail sales up 20.3% in the first 10 weeks, although that was set against a weak trading period the year before.
