LONDON (Reuters) - Superdry <SDRY.L> put its faith in Julian Dunkerton to get the British fashion group back on track on Monday, confirming him as chief executive until 2021, after the co-founder returned in a boardroom coup earlier this year.

Dunkerton, Superdry's biggest shareholder with an 18.5% stake, rejoined its board in April after narrowly winning a shareholder vote, prompting the existing directors, including CEO Euan Sutherland, to resign en masse.

The 54-year-old's return followed a string of profit warnings as the Superdry brand struggled to expand beyond sweatshirts, hoodies and jackets adorned with random Japanese text and as wholesale and e-commerce demand fell.

Shares in Superdry, which in July reported a pretax loss of 85.4 million pounds for the 2018-19 year, were up 0.6% at 436.1 pence at 1031 GMT, although the group's stock price is still down 57% over the last year.

"Despite some grumbles, shareholders largely seem willing to give Dunkerton time to get Superdry back on track. But his task won’t be made any easier by the tricky retail backdrop," analysts at AJ Bell said of Dunkerton's appointment.

Dunkerton and former design and brand director James Holder founded the firm in 2003 and listed it in London in 2010. Holder left the business in 2016. Dunkerton then followed in March 2018 because he could not "put his name to the strategy".

Superdry's new board said Dunkerton, who was named interim CEO on April 2, will have a contract as CEO until April 2021 and his base salary will remain at 600,000 pounds ($753,960).

It said Dunkerton would oversee his strategy of restoring the brand to its design-led roots and lead the business back to growth.

"Today's announcement reflects the board's unanimous view that he is the right person to lead the business through this initial crucial phase of the turnaround," it said.

Dunkerton said his strategy was already seeing early signs of progress, although it would take time.

His initial focus has been on getting Superdry's product ranges right and improving e-commerce. He has increased the number of products sold online, put more stock into flagship stores and cut back discounts to improve profit margins.

Superdry has forecast a slight decline in 2019-20 revenue and only a "modest" increase in underlying profitability.

The board's nomination committee will continue the process to find a long-term CEO successor, it added.

(Reporting by James Davey; editing by Kate Holton and Alexander Smith)