Superdry restructures to cut rents as cofounder leads fundraising
Superdry is to embark on a restructuring plan including rent reductions in stores and a fundraising, backed by its boss and co-founder Julian Dunkerton, and will quit the London Stock Exchange.
Trading in the company’s shares was halted on Tuesday morning after they fell 25% to just over 5p, a record low, valuingit at about £6m. At its peak in early 2018, Superdry was worth £1.7bn.
The struggling British fashion retailer, once the hottest fashion label on the high street and known for its hoodies and jackets, announced the shakeup a fortnight after Dunkerton decided against making a takeover offer with partners.
Superdry hopes the measures will return the business to a “more stable footing” and warned that “unless the restructuring plan comes into effect, it will need to enter administration”.
The three-year restructuring plan, a formal procedure under the Companies Act for companies in financial difficulties, is expected to result in rent reductions on 39 UK sites, the extension of the due date of loans, and “material” cash savings from rent and business rate changes. It has 216 company-owned shops as well as franchised stores.
Dunkerton, who began selling clothing on a market stall in Cheltenham and co-founded Superdry in 2003, has a 26.4% stake in the company and is supporting the fundraising, which is expected to raise up to £10m.
Superdry said by delisting it would “benefit from significant cost savings associated with being listed and implement its turnaround plan away from the heightened exposure of public markets”. Its shares are expected to cease trading in July.
In January, the company said it was considering store closures and job cuts after a year of falling sales and deepening losses. The brand’s popularity has waned in recent years, as it has struggled to appeal to younger shoppers despite teaming up with influencers and stepping up its marketing on Instagram and TikTok.
Dunkerton said: “These proposals are putting the business on the right footing to secure its long-term future following a period of unprecedented challenges. I am aware of the implications for all our stakeholders and I have sought to protect their interests as much as possible in the proposals we are announcing today.
“My decision to underwrite this equity raise demonstrates my continued commitment to Superdry, its stakeholders, its suppliers and the people who work for it. My passion for this great British brand remains as strong today as it was when I founded the business.”
Peter Sjӧlander, the chair, said: “While we recognise the compromises we are asking from some of our stakeholder groups, we would urge them to support the proposals which we believe are the best way of ensuring Superdry’s recovery over the long term.”
Superdry said trading conditions continued to be “challenging” and that without the restructuring plan, the company would need to enter into administration.