Another Q.. anything different anyone would have added ? suggestions?
Evaluate the possible causes of Superdry’s fall in profits in 2011-2012 (30)
Knowledge- Profitability can be seen though ratio analysis- which is the examination of accounting data by relating one figures to another.
Application- Information from evidence - Shares in clothing firm Super group have fallen by a quarter
Analysis- Causes, Not Cause
Cause- 1 Branding- eBay and thrift shops selling items for less- lower profit margins...Burberry problem- Brand associated with the wrong people? 2 Expensive new IT systems at the company’s warehouses had already caused problems – lower stock- increased costs, lower profits 3 big focus on CSR- SEDEX membership- opportunity cost against profit 4 1 million was spent on protecting intellectual rights- increased costs
Not Cause-1 problems were more to do with the increase in overheads rather than the sales therefore this issue may not that effected super dry all that much 2 this was only a short term issue that was handled effectively SuperGroup opened a new, three-storey flagship store on London’s Regent Street that is operating well with no issues 3 this however could improve brand loyalty and staff moral having positive effect on profitability 4 rare cost which has protected superdry against substitute products that could have affected their brand and profitability.
Evaluation- These falls in profits may only be short term as SuperGroup strategy has been to focus on growth – expanding to emerging markets, increased retail estate- takeover - increases costs. So no harm to sales infact feb 2013 superdry saw a rise in sales