Superdry shares could see short-positions build, says IG analyst

The fashion retailer has seen sales struggle amid the Covid-19 pandemic, with its share price struggling to build bullish momentum amid fears of another lockdown in the winter months.

  • Superdry set to unveil full-year earnings in September
  • Fashion retailer could see short-positions build against it, says IG analyst
  • Superdry strengthens balance sheet with new lending facility

Superdry could see its share price come under renewed pressure as investors grow increasingly concerned about rising Covid-19 cases that threaten another national lockdown during the winter months.

The fashion retailer is expected to unveil its full-year results later this month, with investors eager for an update on the company’s performance after it was forced to pull out of its joint venture in China, costing it £6 million in write-offs.

‘I believe that China represents a huge opportunity for Superdry in the longer term,’ Superdry CEO Julian Dunkerton said. ‘As the way people are shopping there changes, it makes sense for us to shift our focus to the growth channels of online and wholesale.’

‘Combined with the improvements we are making to our product ranges, I am confident that this is the right time for us to take back full control of our brand in China and to re-position our operations in the region to deliver profitable future growth for Superdry,’ he added.

Superdry is trading at 163p per share at the time of publication, with the stock down 68% year-to-date.

Superdry secures new lending facility to strengthen balance sheet

Earlier this year, the clothing retailer announced that had agreed a new £70 million lending facility to help it strengthen its balance sheet amid the fallout from the coronavirus pandemic, which adversely impacted its sales.

‘The actions we have taken to date have greatly strengthened our cash position, which together with our new ABL Facility, give us the flexibility to execute our current plans and to secure our recovery,’ Dunkerton said.

‘Together, we are making our way through this unprecedented period, and I'm confident we can reset the brand and deliver on our transformation plans,’ he added.

Superdry: technical analysis

Superdry shares have seen their recovery from March stall of late; April’s peak at 176p remains a level that refuses to be broken on any sustained basis, according to Chris Beauchamp, chief market analyst at IG.

‘The brief bounce above here in early June was quickly rebuffed. At least support at 110p has continued to hold, but for now there seems little prospect of a move higher,’ he said.

‘As the shares approach the top end of the current range we may see bullish momentum ebb and a building of short positions,’ he added.

How to trade stocks with IG

Looking to trade Superdry and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Superdry PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Sell
Buy
-
-
China 300
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.