Now that Fat Face is the latest retailer to be thinking about an IPO, it’s timely to look back at how Sports Direct and SuperGroup have fared since going public.

Now that Fat Face is the latest retailer to be thinking about an IPO, it’s timely to look back at how Sports Direct and SuperGroup have fared since going public.

Fat Face appears to have now joined the long list of retailers formally thinking about an IPO next year and everybody will want to wish them luck. Coincidentally both Sports Direct and SuperGroup have announced interim results today and, of course, both went public not that long ago. With their experience on investors minds, let’s look at how they’ve got on.

The first thing to say is that investors who have held Sports Direct and SuperGroup since they went public (in February 2007 and March 2010 respectively)will have more than doubled their money, so on the face of it these IPOs have been successful and there isn’t much to worry about. Indeed Sports Direct has done so well that it is now in the august ranks of the FTSE 100 index.

The second thing to say is that investors have suffered a lot of “growth pains” at both Sports Direct and SuperGroup since they went public and would have been nursing big losses within two years of their IPOs.

By the end of 2008 the Sports Direct share price had collapsed after ‘Maverick Mike’ Ashley had embarked on a debt-fuelled spending and investment craze, whilst by June 2012 the SuperGroup share price had halved after a series of profit warnings and IT systems issues.

However, it is always darkest before the dawn and investors who kept faith with the managements and bought shares at the low point will have done particularly well in both Sports Direct and SuperGroup over the last couple of years. But the City doesn’t like surprises and it has certainly been an eventful ride in both cases.

At first glance, today has brought a return to the bad old days of 2007/08 for Sports Direct, with the share price slumping by 8% after some slightly below par interim results, a slightly subdued current trading statement and the news of a slight altercation with a key supplier (in the form of Adidas). And the mood was not helped by the announcement that the respected finance director, Bob Mellors, is having to retire because of ill health. 

But Sports Direct is not the only fashion retailer to be finding the pre-Christmas consumer spending environment quite slow and competitive and it is a testament to the quality of the business that management are nevertheless still confident of achieving the £310m full-year EBITDA target.

And next year brings both the World Cup in Brazil and the prospect of Mike Ashley himself getting more involved in improving the profitability of the European retail and online operations.

Meanwhile over at SuperGroup the message with the interims today was one of “progress on all fronts”, although the scale of the investment that is taking place in strengthening the management team, replacing management information systems and building a new distribution network shows that not everything in the garden was as rosy as it seemed back in March 2010 at the time of the IPO.

But some things never change and founder Julian Dunkerton is as bullish as ever about the development of the product range: he told the assembled analysts at the results meeting this morning that the mens’ jackets in the Autumn/Winter 2014 collection are “literally the best in the world”.

Yet with the spring/summer 2014 wholesale order book showing growth of about 26% it is clear that plenty of people share confidence in the quality and value of its products and it is pleasing to hear that the first weeks of the Christmas trading period have been encouraging, continuing the trading momentum delivered during the first half, and that “the group has been, and will continue to be, focused on full-price trading during this period to optimise profitability”. No pre-Christmas discounting at SuperGroup then.

In the round, both Sports Direct and SuperGroup have evolved and adapted to the demands of being publicly quoted companies and still meet the City’s desire for “growth”.

One thing the two companies have in common, however, is that that they don’t meet the City’s other desire of “income”, because neither is yet planning to pay a dividend given the array of investment and acquisition opportunities available to them.