‘Dad brand’ tag doesn’t bother retailer’s founder
The founder of clothing retailer Superdry has said he does not care that it is increasingly seen as a “dad brand”, as he prepares to take the business private. Julian Dunkerton said he was “not ashamed” of appealing to older shoppers after the company was forced to launch a significant restructuring programme following a slump in sales.
The overhaul will lead to the business quitting the London Stock Exchange, as Dunkerton seeks to rescue the business he launched from a market stall in the Gloucestershire spa town of Cheltenham in 2003.
He said: “I’m not ashamed of having a 50-year-old consumer as long as I’ve got a 16-year-old coming through as well.”
The announcement marks the latest chapter in the history of Superdry, which started life as an in-house brand for Dunkerton’s retail business Cult Clothing.
As the brand grew, Superdry’s garments became popular with millennials. However, over the last decade, it has developed an association with older male shoppers.
Dunkerton, the chief executive, said the brand’s recent inability to modernise haf been fuelled by excess stock. “The fact is we’ve had to deal with 19 million garments and have been quietly reducing them.
“But if you’re releasing three million garments into the market that are old and historic, it’s going to hurt your brand and stop you from developing.
“We’re almost at the point where we need to focus on creating new products and pushing forward.”
His comments come as the fashion retailer said this week that in July it would quit “the heightened exposure of public markets”, which have been buffeted by weak sales and soaring costs.
Revenues at Superdry sank by almost a quarter (23.5%) to £219 million (NZ$461M) over the six months to the end of October last year.
Dunkerton added: “We’re in a very turbulent, difficult turnaround situation.
The speed of decision-making that is required and the cost of being in the public markets do not make sense.”
Shares in the retailer have plummeted by more than 80% over the past six months, meaning the business is now worth just £6m.
“[Being public] takes up an awful lot of my time and it takes up a huge amount of cost,’’ Dunkerton said. ‘The cost savings of coming off the stock market are enormous and will help to deliver the long-term prosperity of this company.
“If you just take the audit fee, we’re talking millions of pounds. I simply wouldn’t have to do that in a private environment.”
The decision to leave the London Stock Exchange is part of a package of measures to help avoid Superdry falling into administration.
The company is plotting a £10m (NZ$21M) equity raise and a major restructuring that will see about 39 of its 90 stores handed steep rent cuts.
Loans with investment companies Bantry Bay and Hilco will also be extended.
Jonathan De Mello, founder of retail industry consultancy JDM Retail, said: “Superdry urgently needs to restructure its property portfolio and it is good that they are now finally doing so.
“In their push to expand when they were performing well, they signed expensive leases on large properties. As sales and profit dropped, many of their stores are now trading at unaffordable levels.”
Dunkerton also hit out at government ministers for allowing Chinese online retailers such as Shein to undercut domestic rivals.
He criticised a so-called tax loophole through which Shein benefits by shipping smaller parcels straight from China.
“I think it is an absolute disgrace that we would allow a company to fly in single products up to a value of circa £1 billion into the economy and not tax it.”
His criticism comes as Shein weighs a possible float in London.
In response to similar criticism earlier this year, a Shein spokesman said: “We keep prices affordable through our on-demand business model and flexible supply chain.
“This reduces inefficiency, takes out wastage of material and lowers our unsold inventory. We pass this advantage to our customers and this has driven our growth.”