Dunkerton's Superdry revolution becomes merely 'stabilisation'

Three months after founder Julian Dunkerton returned to Superdry via a spectacular boardroom coup, the tone of triumph has been replaced by sober realisation that the aims of the revolution will not be secured quickly.

Last year’s ugly numbers – a statutory loss of £85m and a 57% fall in “underlying” pre-tax profits to £41.9m – were pinned on the old regime, which was fair. But the promise for this year is merely “stabilisation” and “reset”, which translates as dull.

Revenues are forecast to fall slightly, so any help to profits will rely on persuading punters to pay full price for their clothes – not easy in the current climate. The stock market is under no illusions: the share price has fallen 13% since April’s excitement.

Yet, if “re-igniting the brand DNA” sounds complicated, so does the plan for leadership at Superdry. Do Dunkerton and chairman Peter Williams see eye to eye? The duo sounded mutually admiring in front of their City audience on Wednesday, but that’s probably not the main issue. The bigger question is what happens when Dunkerton, an 18% shareholder, gives up being “interim” chief executive and assumes a role that is yet to be defined but sounds suspiciously like issuing instructions from the back seat.

Here is Williams’s description of what’s expected from a permanent chief executive: “It will be vital to ensure that the successful candidate can work closely with Julian and the rest of the leadership team to ensure that the direction of the business remains true to Julian’s vision.”

So a chief executive who is really a chief operating officer, then? Isn’t that what caused all the trouble with Euan Sutherland, the boss who was defenestrated in the coup? Everyone will claim to be wiser now but repeating a failed management experiment looks very odd.

Is the economic outlook alarming, encouraging or mildly comforting?

Is the economy moving up, down or sideways? All interpretations are possible after another set of inconclusive, or baffling, data. Growth was 0.3% in May, which is supposed to be encouraging, but the pace may not have been enough to compensate for weakness in April.

So the outcome for the second quarter would seem to hinge on the performance in June, where indicators are poor. The British Retail Consortium said this week that annual growth in consumer spending slowed last month to the weakest rate since records began in 1995. Add it all up and the April-June quarter may turn out to be roughly flat. Some economists expect to see modest contraction.

On the other hand, the outlook for the third quarter is slightly brighter. Why? Well, the next Brexit deadline falls in October and may inspire stockpiling, the phenomenon that helped to produce growth of 0.5% in the first quarter of this year, when companies were preparing for (non-) exit from the European Union in March.

Then again, if these swings are really only a function of companies piling up stocks to cope with the risk of a no-deal Brexit, isn’t the short-term data really meaningless? Well, yes, but the confusion doesn’t end there. Bank lending to businesses has stalled, as has business investment, but there has been no corresponding rise in unemployment. Rather than preparing for recession, it feels as if companies are still sufficiently confident to want to keep their employees on the payroll.

At a push, one could call this picture mildly comforting: businesses are still waiting to see what happens with Brexit. Yet the reverse is also true and is alarming: the UK economy still does not look prepared for a no-deal Brexit. The shock could be as severe as feared.

Note that the pound, often a better guide than monthly GDP numbers, has quietly fallen from $1.30 to $1.25 against the dollar during the course of the Tory leadership election. That is not a good sign.

Vodafone chiefs’ pay cuts may not stave off shareholder rebellion

After an unscripted dividend cut, Vodafone really doesn’t need a shareholder rebellion over pay to add to its troubles. Thus chief executive Nick Read and finance director Margherita Della Valle have “voluntarily” requested a one-fifth cut in their latest batch of incentive shares to take account of the lower share price.

The move may win over a few undecided investors, but these eleventh-hour gestures do not have a great record of success. In Read’s case, the award is still worth a potential £5.1m. It still looks a lot for a boss who said he wouldn’t cut the divi but then did.