Since selling is half of the investing equation, we asked some of our contract writers to share some of the lessons they’ve learned over the years!

Boston Beer Company

What it does: Boston Beer manufactures a range of alcoholic drinks. Its best-known brand is Sam Adams.

By Stephen Wright. I wish I’d never bought shares in Boston Beer Company (NYSE:SAM). The stock turned out to be a terrible investment for me, but more than that, I bought it for all the wrong reasons. 

I bought the shares in various installments around August 2021. At the time, the stock was falling after some previous good performance and I decided that it looked cheap.

The trouble is, I wasn’t basing that view on very much – a strong balance sheet and a sense the stock couldn’t go much lower. How wrong I was.

The business had been faring badly as a result of overinvestment in hard seltzers. When this turned out to be a passing trend, rather than something more durable, the value of the stock fell sharply.

Ultimately, I got rid of the stock at a significant loss. And the current share price is still well short of where I sold my stake as the business continues to battle headwinds.

The lesson here for investors is clear enough. Proper research into investments involves more than just looking at prices and seeing that they’re falling.

Fortunately, I’ve been able to move on from that investment. And I’m careful nowadays not to repeat the same mistakes.

Stephen Wright does not own shares in Boston Beer Company.

Cineworld Group 

What it does: Cineworld Group is the world’s second-largest cinema chain and operates in the US, Israel and across Europe. 

By Royston Wild. I opened a position in Cineworld Group (LSE:CINE) back in 2018 when I paid 297.4p apiece for its shares. Almost two years later to the day I sold all of them for 25.8p. 

When I bought Cineworld shares the firm seemed to be in great shape. Powered by a steady stream of blockbuster hits, the global box office was sitting at record highs. The UK company had also taken over Regal Entertainment a year earlier to gain a foothold in the lucrative North American market. 

The problem was that the business had loaded itself with debt to pursue global expansion. So when the pandemic came along and its theatres shuttered, it came close to collapse. That’s when I decided to sell up. 

I’m pleased I did, instead of hanging around for a potential turnaround. Cineworld’s share price now sits at just 0.42p. And the company will be delisted when administrators are appointed soon, wiping out shareholders completely. I learnt a valuable investing lesson: be careful when buying businesses that load themselves with debt. 

Royston Wild does not own shares in Cineworld Group. 

Greatland Gold

What it does: Greatland Gold hopes to be extracting gold and copper from its mine in Western Australia by the end of 2024.

By James Beard. Down nearly 75%, my investment in Greatland Gold (LSE:GGP) has been a bit of a disaster.

I should have undertaken better research and considered its valuation more closely before buying the shares.

The company’s flagship Havieron gold-copper project was last independently valued in December 2021, at $1.2bn. This implies that Greatland’s 30% share is worth $360m – 25% less than its current market cap.

But the directors argue this is not reflective of the mine’s potential. They claim it contains 6.5m ounces of gold alone. At today’s prices this is worth nearly $13bn.

They also believe that the company’s other substantial interests — which are in the very early stages of exploration — are overlooked.

And because the company feels unloved, it’s planning to list on the Australian stock market. As part of the process, it’s considering whether to raise more money. But if it proceeds, this will mean further dilution for me.

James Beard owns shares in Greatland Gold.

Shell

What it does: Shell is an upstream producer and downstream marketer of oil, gas and energy products.

By Christopher Ruane. Early in the pandemic I bought shares in London-listed oil major Shell (LSE: SHEL) and US peer ExxonMobil.

What happened next?

Exxon maintained its longstanding Dividend Aristocrat status, continuing to raise its shareholder payout annually. But Shell cut its dividend for the first time since the Second World War.

Since then the dividend has grown sharply, although it remains well below its pre-pandemic level.

Seeing the dividend contract for the first time in decades was a surprise to me. But dividends are never guaranteed, so maybe I should have been less shocked.

What really made me wish I had not bought Shell was that the sudden, huge cut shook my faith in management. Rivals like Exxon kept a steady head, so Shell’s large cut seemed like a knee-jerk reaction to me.

I lost my faith in the company’s management at that point and ended up selling all my Shell shares.

Christopher Ruane does not own shares in any of the companies mentioned.

Superdry

What it does: UK-based fashion retailer operating both online and through a network of 219 brick-and-mortar stores worldwide.

By Zaven Boyrazian. I’ve made plenty of mistakes as an investor over the years. And one of my biggest ones was buying shares in Superdry (LSE:SDRY) in 2017. The stock fell over 90% before I finally exited my position in September 2020. And even today, shares have tumbled even further. So, what happened?

There were a lot of moving parts affecting the Superdry share price. But looking back, there was a glaring warning signs that something was seriously wrong.

The co-founder and CEO, Julian Dunkerton, decided to step down in 2018, selling off £71m worth of shares in the process. Then, only a few months later, he decided to return, stating that his previous departure and massive stock selloff was a protest against the strategy other managers were pursuing.

Internal politics within the executive suite is never a good sign. And considering the fashion stock continued to crash even after Dunkerton resumed his role, this spat has seemingly left a permanent mark on a once-thriving business.

Zaven Boyrazian does not own shares in Superdry.

The post 5 shares Fools wish they never bought appeared first on The Motley Fool UK.

There has been a stream of bad news, from financing arrangements that smell of desperation to a delay in the auditors signing off the final accounts this week. But they have now been rubber-stamped and published.

So how do things look?

Resilient demand

One common criticism of the Superdry investment case is that the brand is tired and past its prime.

Yet looking at the full-year results, revenues grew 2% year-on-year. At a time of inflationary prices, a small revenue increase like that could mean actual sales volumes fell. A lower gross margin (53% versus 56% the prior year) may also suggest that the company has been discounting more.

Nonetheless, the resilient revenues suggest to me that the brand still has more traction with its customer base than some critics recognise.

The fact that the company was able to sell intellectual property rights in some Asian markets for $50m this year shows that the Superdry brand still has pull.

Financial challenges

To my mind, the big question about Superdry is not whether it still knows how to design and sell clothes people want to buy. Rather, it is about the economics of the business.

Last year, the company swung from a post-tax profit of £22m the prior year to a post-tax loss of £148m. That is close to three times its current market capitalisation.

To shore up its liquidity, the company has agreed to loan facilities that require big interest payments. It also had a rights issue this year, diluting existing shareholders.

Those actions suggest that the company is on the ropes.

Finding a way forward

Juggling all those plates will not be easy. If interest payments eat into cash flow, the company could need to shore up liquidity further. That includes a risk of further shareholder dilution.

Meanwhile, ongoing customer demand is not a given. Superdry sells a mid-market/premium product at a time when many economies are weak. Of particular concern is the performance of the company’s wholesale division. That has had a hard time. However, Superdry invited several hundred wholesale customers and buyers to an event showcasing its upcoming range. That could help create excitement — and sales.

High risks

Clearly, Superdry shares carry sizeable risks. If things go from bad to worse, the shares could ultimately hit zero.

However, I also think the shares could soar if the turnaround goes well. In that case, I would not be surprised if they pass the £1 mark again.

For that to happen, I think customer demand needs to stay high and the company needs to improve its balance sheet. It has little room for error at this stage, in my opinion.

Despite the risks, I continue to believe in the underlying story here and will hold my Superdry shares.

The post Will Superdry shares ever hit £1 again? appeared first on The Motley Fool UK.

On the London Stock Exchange, a good few are trading near their 52-week lows now. And some of them look cheap.

Risky fashion?

I’ll start with a penny stock in the fashion business, Superdry (LSE: SDRY).

Superdry shares have crashed heavily from their 2018 highs. And at 60p at the time of writing, they’re around their all-time low.

When you have a niche fashion outfit, selling mid-priced gear on the back of celebs, with the shares on a very high valuation… well, we saw what happened.

But the rebooted company looks a lot different now. After a refocus, a cost-savings programme, and an equity raise, there are profits on the horizon again.

Analysts don’t expect that profit before 2025, but it would put the shares on a price-to-earnings (P/E) ratio of only seven.

Risky? For sure. Worth a closer look? I think so.

Big dividend

I’ve watched investing firm Man Group (LSE: EMG) for some time now.

The share price might be around its 12-month low, but Man Group shares are still up 19% in the past five years.

The price crashed in the pandemic. But it’s since put in one of the best recoveries among finance and investment stocks.

Man runs a hedge fund, the biggest publicly traded one in the world. So it gives small investors a chance to get in on something that’s often seen as only for the well heeled.

Its investing strategy looks a bit mysterious, and I don’t pretend to understand it fully. But I do understand a 6% dividend yield, forecast to grow strongly in the next two years.

It should be well covered by earnings too.

There’s uncertainty risk here. But this is another I want to dig deeper into.

Polymer stuff

Synthomer (LSE: SYNT) is one of the world’s foremost suppliers of aqueous polymers, which seems like a bit of a niche. But it includes things like nitrile for synthetic latex gloves.

Remember how popular they were in the pandemic years?

Well, when sales boomed, Synthomer overstretched itself on the acquisition front.

The later mix of falling demand, rising debt, and soaring interest rates drove the company to a loss in 2022.

I looked at this one about six months ago, and I feared we hadn’t reached the bottom yet. I was right, and the shares slid further, down as low as 69p at the time of writing.

But with a plan of restructuring and disposals, the firm reckons it can solve its debt problems and get back to profit.

The City seems to agree, marking in a profit for 2024. Analysts even expect the dividend to return, with a yield of 5%.

This is another that I think could be a good long-term investment. I’m just not sure if the shares might go lower before they pick up.

The post 3 dirt cheap LSE stocks to buy near 52-week lows? appeared first on The Motley Fool UK.

So, what went wrong? Can the business shake off its penny stock status and return to its former glory? And is this potentially a once-in-a-lifetime chance to buy cheap shares?

Let’s explore.

A catastrophic fall

Back in January 2018, long-term Superdry shareholders could be forgiven for feeling smug. The stock had climbed 315% since its £5 flotation price less than eight years before.

Since then, the shares have crashed 96% from the peak and 86% from the IPO. This unfortunate saga serves as a useful reminder that there are no guarantees with stock market investing.

The company traces its origins to the founding of Cult Clothing in 1985. The Japan-inspired Superdry brand was born in 2003 and the first store opened in Covent Garden in 2004. It was a huge hit.

By 2015, the firm was boasting celebrity endorsements from the likes of Idris Elba. Proving particularly popular among younger consumers, the Superdry share price was rising on a volatile, but broadly upward trajectory.

However, the fashion industry is a fickle one and the brand’s since fallen out of favour. Increasingly, it appears consumers don’t want to pay a premium for its products, evidenced by shrinking sales and a worsening balance sheet.

The company has blamed many factors for its share price decline. The pandemic, the cost-of-living crisis, and this year it also identified poor weather as the culprit for underwhelming retail sales. Whatever the reason, it seems the brand simply isn’t as popular as it once was.

The route to recovery

This doesn’t mean a turnaround is impossible. Following a withdrawal of its “broadly breakeven” profit guidance for FY23, the Cheltenham-based retailer recently completed a £12m equity raise. This has injected much-needed liquidity into the business.

In addition, Superdry is taking steps to streamline operations. The company has identified £35m in cost savings from estate optimisation, logistics, better procurement, and a range reduction. It expects it will realise these efficiencies by FY24.

Looking ahead, the business is more optimistic. It anticipates it can deliver “a material uplift in underlying profitability over the medium term.” Plus, it would be remiss of me not to note the company still owns some valuable intellectual property in its unique brand.

In my view, if Superdry can deliver a more profitable, simplified business, it becomes a potentially attractive takeover target. A possible acquisition’s impact is hard to predict, but if it materialised, this could be good news for existing shareholders.

A rare chance to buy?

Superdry shares are trading at historic lows. Provided the company can chart a better course to financial health, brave investors might potentially make a good return from investing today.

However, the risk/reward profile of this penny stock is uncomfortably high for me. The shares may look cheap, but I prefer to invest on the basis of concrete results rather than unconfirmed optimism or takeover hopes. For now, I’m giving this potentially once-in-a-lifetime chance a miss.

The post A once-in-a-lifetime chance to buy penny share Superdry under 77p? appeared first on The Motley Fool UK.

A fallen brand

I would argue that Superdry is a fallen brand. Once a popular fashion staple known for its unique blend of colours and edgy Japanese fonts and logos, its popularity has waned in recent years. It was so on-trend some years ago it was endorsed by stars including David Beckham. Now, it’s more associated with middle-aged men perhaps trying to stay connected to their youth, in my opinion.

Let’s take a look at Superdry’s share price first before we explore what went wrong. As I write, they’re trading for 76p. A penny stock is one that trades for less than £1. At this time last year, they were trading for 126p, which equates to a 39% drop over a 12-month period. Over a five-year period, the shares have dropped by 95% from 1,295p to current levels.

A simple way of looking at Superdry’s demise is to say the brand went out of fashion, coupled with the rise of fast fashion and more savvy competitors who were able to cater to the changing needs of its customers as well as changing trends.

To buy or not to buy?

Let’s start with the bull case. Firstly, Superdry shares are dirt cheap at present. They trade on a price-to-earnings ratio of just seven. I think there is little risk involved if I were to buy a small number of shares.

Next, Superdry has had liquidity issues in the past. However, recently, I can see it has raised nearly £12m through a new equity issue. This should be able to support growth initiatives as well as shore up its balance sheet.

In addition to this, Superdry CEO Julian Dunkerton recently purchased a million shares. When insiders, especially at senior level, are spending their own cash on shares, this could be a positive sign. After all, who better to attest to the potential success and direction of a business than those running it.

To the bear case then. Superdry has an image problem, in my opinion. Although once a staple of young trendy fashionistas, it has attempted to adapt and move with the times but I’m not sure it can change up its whole approach and product line to become a staple once more.

In addition to this, Superdry now operates in a very competitive market dominated by online fast fashion companies including boohoo and ASOS. The face of retail and fashion has changed massively in the last few years and I fear Superdry has been left behind and may not be able to recover to former glories.

Finally, Superdry’s performance in recent years has been quite poor. Coming up to date, it is forecast to record a loss for the current fiscal year.

A penny stock for my watch list

Reviewing the positives and negatives for Superdry, the cons far outweigh the pros for me.

Overall, I’ve decided not to risk any of my hard-earned cash on Superdry. I believe there are better opportunities out there. However, I will still keep Superdry shares on my watch list and keep an eye on developments moving forward.

The post Is this falling penny stock an opportunity or one to avoid like the plague? appeared first on The Motley Fool UK.

Well, I won’t buy any share if I don’t think I’d want to keep it for 10 years, no matter what the price. In fact, the share price is one of the things I pay the least attention to.

So are there any priced below a pound, in companies with market-caps of £100m or less, that look like long-term keepers? Here are three that might make the cut.

Nano technology

Nanoco (LSE: NANO) shares have had a tough five years. And they’re way down from the heights of 2013.

Nanoco does what’s called quantum dot technology, used in solar cells, among other things.

It’s been a ‘jam tomorrow’ growth stock for some time. And it’s an example of the risk we face when we buy into new technology stocks. But interim results in March make me think the jam might be here soon.

The firm says the final valuation for its commercial product materials is underway. And it expects orders by the end of 2023.

Nanoco has sold some intellectual property. So it looks like it’s on a decent financial footing now.

It’s risky, and I might wait to see those orders happen before I’d buy. But if it turns profitable, I could see this as a 10-year holding.

Tiles and floors

Topps Tiles (LSE: TPT) sells tiles and flooring products. And the share price has lost 50% in five years.

Judging by its first-half update, Topps seems to be doing fine. For me, it’s a value play, as I rate the shares as oversold.

A price-to-earnings (P/E) ratio of 15 might not look cheap. But forecasts suggest it could halve in the next few years.

The dividend yield is above 7%, and again that would rise in the coming years if the analysts are right.

There’s clearly a risk that Topps Tiles shares could remain depressed, or even fall further, if interest rates rise again. And another rise does seem inevitable.

Interim results are due on 23 May. Might we see an upbeat response from investors?

Back in fashion?

I think 2023 might be a good year to get back into Superdry (LSE: SDRY). The retailer fell out of fashion big time, and the shares are down more than 90% in five years.

Forecasts have a loss down for this year. But they show a nice turnaround coming, which could drop the P/E to just nine in a couple of years.

Liquidity has been a problem. But a new equity issue has just raised a gross £12m. If that’s enough to keep it going until it’s back to profit, I think this might even be one of the UK’s best penny stock buys.

CEO Julian Dunkerton has just bought nearly a million shares, and that’s also a good sign.

A loss this year might make it too much of a risk right now. So it might be wise to wait a bit. But if I buy, it will again be for at least a decade.

The post 3 penny shares I’d buy and hold for 10 years appeared first on The Motley Fool UK.

While most investors are running for cover some bold souls are sniffing a buying opportunity. So far, most will have regretted their bravado. Just because a stock has fallen, say, 50%, doesn’t mean it can’t halve again (or collapse altogether).

In fact, Superdry has fallen a lot more than that. If I’d invested £5,000 in its shares five years ago, I’d have lost a staggering 94.69% of my money. Today I’d have less than £260, after trading costs, in a major blow to my portfolio. Peak to trough, the Superdry share price has fallen from 2,074p on 5 January 2018 to just 81p today.

This stock just keeps falling

The fashion casualwear retailer and wholesaler has been through an incredibly turbulent time and there’s little sign of the collapse slowing. It’s down 46.42% over the last year year, 35.24% over three months and 22.1% over one month.

Last week, it fell another 5.02%. These numbers perfectly illustrate the dangers of trying to catch a falling knife.

Yet Superdry remains a solid brand and high street fixture. Full disclosure: I own eight or nine of its T-shirts, and the quality is perfectly acceptable. That may be a problem, of course, as I’m a middle-aged dad who thinks this makes me a cutting-edge fashionista when the truth lies elsewhere.

Oldies like me parading around with a Superdry logo on their chest scare off the cool kids. While it hasn’t completely lost the youth market, it’s not winning it either.

Sales have been declining while management has had to cope with the problems afflicting every other retailer, such as rising textile prices, labour costs and business rates, and the cost-of-living crisis. Shipping delays/cost rises haven’t helped.

It’s really, really risky

Co-founder and CEO Julian Dunkerton returned to salvage his ship in 2019, after a six-month struggle to rejoin an unimpressed board, but hasn’t turned things round yet. Hopes in January that Superdry would turn a profit floundered on poor trading in February and March. Sales are growing, but slower than hoped.

Dunkerton is closing shops and cutting back clothing ranges to save money, but this reinforces the image of a brand in long-term decline.

Still, I love a bargain myself, and today’s valuation of just 2.19 times earnings is certainly cheap. Yet I can see further pain ahead. Just this month Dunkerton raised £12m from a stock issue, diluting existing shareholders. The sale price was set at 76.3p, some 5.8% below today’s 81p share price.

Anybody investing in Superdry today must brace themselves for a long and bumpy road. The whole debacle evokes painful memories of Joules and Cath Kidston, while the cost-of-living crisis isn’t over yet. I’m tempted, but it’s too risky for me. People have lost a lot of money on this stock and I don’t want to join them.

I might end up kicking myself if Superdry gets its game on, but given all the uncertainties, I’ll stick to buying its T-shirts. At least I know they’re good value.

The post If I’d invested £5k in penny share Superdry five years ago here’s what I’d have now appeared first on The Motley Fool UK.

What on earth has gone wrong here? And is there any chance of a turnaround for this well-known clothing brand?

A fading brand?

Superdry began with the founding of Cult Clothing by Julian Dunkerton and a business partner in 1985. The company expanded rapidly, particularly with a younger demographic in university towns.

In 2003, Dunkerton co-developed a new in-house brand called Superdry. With its bright colours and unique Japanese font, the clothing brand established a unique look.

This stylish image was strengthened when David Beckham was photographed wearing a Superdry leather jacket. Obviously this was a major coup for the brand at the time and it gained in popularity.

However, that was nearly two decades ago. Nowadays, I don’t see too many A-list celebrities sporting its streetwear. In fact, it has an image problem in the eyes of some young consumers, at least in the UK.

The main barb thrown at the brand is that it’s for middle-aged men attempting to remain trendy. This is a major issue, as it’s notoriously difficult to repopularise a fading brand.

Profit warning

Last month, Superdry released a trading statement in which it withdraw its existing profit guidance of “broadly breakeven” for FY23. It blamed the cost-of-living crisis and bad weather for poor sales of its new spring-summer collection in February and March.

The company now thinks it could be loss-making this year due to this “challenging trading environment”. It expects revenues of £615m to £635m, slightly up from £610m in 2022.

Following this, the company announced that it had agreed with its lender to increase flexibility in its asset-backed loan of up to £80m. It’s also mulling over a possible capital raise through a 20% equity sale, which would dilute existing shareholders.

Plus, the retailer is proceeding with a plan to sell its intellectual property assets in the Asia Pacific region for approximately £34m.

Some positives

As dire as all this looks, I think there are some positives here.

First, CEO Julian Dunkerton has skin in the game. He’s been buying shares in his own company, which means he thinks it’s undervalued and things could improve.

Second, the fact that the brand might be associated with middle-aged men need not be disastrous. If some customers are reliving their youth through its clothing, then that suggests brand loyalty. And many of these men may have the disposable income to buy, say, a £200 Superdry leather jacket.

Personally, I’d rather have a customer base made up of some wealthier middle-aged adults than younger, potentially less loyal consumers. After all, it’s well documented that fickle teens can make or break a brand.

My move

I believe there is valuable brand equity here. This could be unlocked by a larger retailer acquiring the company.

Now, I don’t invest in stocks on the basis that an acquisition might be on the horizon. But I do think Superdry’s market cap of just £69m is very low. Any kind of positive news could send the shares soaring.

So I’m going to keep the stock on my watchlist for now.

The post Down 94%! Is there any hope for penny share Superdry? appeared first on The Motley Fool UK.

Lithium

Cleantech Lithium (LSE: CTL) only went public a little over a year ago. Since then, the stock is up a very respectable 27%.

This is a pre-revenue company that holds licence rights over three lithium projects in Chile. Its mission is “to produce battery-grade, carbon-neutral lithium for the EV future“.

It aims to do this through extracting lithium from brine without the need for evaporation. This, the firm claims, should result in no harm to the local environment.

However, the stock is down 49% since the middle of February.

There are two big reasons for this drop. First, wholesale lithium prices have tanked recently. Second, Chile’s president last week unveiled plans to bring the nation’s lithium industry under state control. He said there would be stricter environmental rules.

So why am I interested? Well, the authorities in Chile have already signed off on its exploration licences. The company is to begin drilling shortly. Plus, it already has two other projects under development in the country.

After the nationalisation announcement, the lithium miner said: “the Board have been given reassurances that [our] assets will not require majority state participation“.

Given its cleaner extraction techniques, its projects may still be commercially viable. So, despite the obvious risks, I’m watching developments closely.

Clothing

Superdry (LSE: SDRY) clothes have been worn by the likes of David Beckham, Leonardo DiCaprio and Kate Winslet down the years. If only the share price had done as well as those A-list stars. It’s down 94% in five years!

Earlier in April, the retailer issued a profit warning, saying that its earnings would fall short of its previous guidance. It blamed the cost-of-living crisis and poor weather for its spring-summer collections performing poorly.

But this is part of a longer trend in declining sales now. Revenue was £610m last year, down from £872m in 2018. Profits and margins are also down over this time, and there’s a risk things could worsen.

However, I still find the company’s clothes (with the Japanese-style graphics) very distinctive. And the name Superdry remains well known to many in the UK. So I think there is major brand equity here.

The firm now has a market cap of just £74m. I think value could be unlocked in the company from here, potentially through an acquisition. So I’m keeping this one on my watchlist while I dig in a bit more.

Shipping

Braemar hasn’t fallen as much as the previous two stocks, but it’s still down 17% in just under six months.

This is a leading global shipbroker serving large industry players across different time zones. Its well-diversified operations include tankers, dry cargo, and renewables.

Owning this stock would give my portfolio exposure to growth in global shipping. That said, shipping markets are driven by freight rates, which are cyclical. So there’s a risk I could mistime my investment.

But the company is on track to double its profits by 2024. And there’s a well-covered dividend here too, with a forward yield of 4.3%. So I’m very interested.

The post Down 17% to 94%! 3 penny stocks I’m watching like a hawk appeared first on The Motley Fool UK.

The shares slump and slide

Just over five years ago, the Superdry share price was testing record highs. On 5 January 2018, this stock closed at 2,074p. Alas, it then began a steep slide, closing at 405p on 14 December 2018.

Things got even more painful for shareholders during 2020’s pandemic panic. On 20 March 2020, the stock closed at 103.3p. Fair enough — after all, who was buying fashion jackets during Covid-19 lockdowns?

After a strong recovery in 2020-21, the stock closed at 472p on 14 May 2021. But it’s never been anywhere near that level ever since. Earlier this morning, this stock hit a record low of 82.5p. Yikes.

As I write late on Tuesday afternoon, the Superdry share price has rebounded to 87.26p. This values the chain at £71.7m — a tiny fraction of its worth in its glory days.

Here’s how the shares have performed over seven different periods:

Over all seven timescales, this former growth stock has dived. It’s down by three-tenths over six months and has almost halved over one year.

Even worse, it has collapsed by almost 95% over half a decade. Shockingly, £1,000 invested into this stock five years ago would be worth just £54.80 today. That’s brutal.

Superdry sales stumble again

Superdry was founded as Cult Clothing by Julian Dunkerton and a business partner in 1985. Beginning with one store in Cheltenham, the group expanded rapidly, favouring university towns

In 2010, the group floated in London at a share price of 500p, valuing it at £395m. But it faltered late last decade and Dunkerton returned to head the company in 2019, aiming to turn things around with a new strategy.

Last Friday, 14 April, Superdry released its latest trading statement. Blaming the cost-of-living crisis and bad weather for poor sales in February and March, the chain scrapped previous profit guidance.

Instead of breaking even this year, it might be loss-making, due to a “challenging trading environment”. It expects revenues of £615m to £635m this year, slightly up from £609m in 2022.

Does this fashion firm have a future?

I’ve never invested in fashion brands, largely because I’m the least fashion-conscious person I know. Also, experience has taught me that fashion labels often go stale over time as consumers are drawn to new names.

So is Superdry on the way out, or can it turn the tanker around? One warning sign is that the group is considering raising equity by issuing new shares worth up to a fifth of its current market value (£14.3m).

On the other hand, it has revitalised its product offer and has identified £35m of cost savings, with more to come. This could mean store closures and job losses, but could improve the bottom line.

As a long-term value investor, I won’t be buying Superdry shares any time soon. They’re just too volatile and risky for me. Then again, I could imagine some younger and braver investors buying these shares on hopes of a sustained recovery!

The post The Superdry share price keeps crashing! What next? appeared first on The Motley Fool UK.