Good evening/morning, it's Paul here.

I'll be writing this week's SCVRs, with Graham also chipping in some extra sections on Tuesday.


Book recommendation

I hope everyone enjoyed the wonderful, mild & sunny weather over the weekend. I've been sunbathing on my terrace (in late October, this is madness!) whilst immersed in a great book, "Open Secret", by Stella Rimington, the retired Director General of MI5. It's a fascinating, and at times highly entertaining book - I recommend it to you.


Clothing retailers

This very mild weather won't be helping the embattled clothing retailers though. They really do need a cold snap in Sept/Oct, to get the sales moving of heavy & more expensive winter ranges.

As we know the whole sector is struggling, apart from online-only operators such as ASOS (LON:ASC) and Boohoo (LON:BOO) , both of which have reported excellent trading & growth this year.

Shares in Superdry (LON:SDRY) hit an all-time-high of £20/share in Jan 2018, but have since plunged to only 733p. I had a look at the figures & profit warning last week, and came close to dipping my toe in with an initial purchase. However, a forward PER of only 7.4 tells me that the market is expecting a further downgrade. It does look as if it may have another profit warning in it.

SDRY's profit warning here on 15 Oct 2018, blamed forex hedges, and warm weather for a lowering of profit expectations, saying;

... the summer and autumn to date has seen unseasonably hot weather conditions in the UK, Continental Europe and on the East Coast of the USA.  Critically, these conditions have continued through into September and the first half of October and have significantly affected demand for autumn/winter product, particularly sweats and jackets, which account for around 45% of Superdry's annual sales


The Sunday Times reported that the co-founder, Julian Dunkerton, wants to return to sort out the business, which he sees as on "a completely wrong path". I wonder if there might be some activism in the  offing, to oust existing management?

I'll be keeping an eye on this.



(this section was written on Sunday evening)

French Connection (LON:FCCN)

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