Superdry’s fight for survival will see it exit stock market

Julian Dunkerton

Embattled fashion brand Superdry has announced the details of a restructuring plan in a bid to save the Cheltenham company from collapse.

The plan will see it pay reduced rents at 39 of its UK sites, extend its loans and exit from the Stock Market.

Superdry struggles have been well publicised and value of its shares have plummeted as a result.

The company, which started out life on Cheltenham market, added that it would be forced to appoint administrators if the plan is not put into place.

Shares in the company have crashed from more than 500p five years ago to just to eight pence, which leaves the equity valued at less than £8m.

The company has struggled with weak demand for its clothes and problems with its wholesale business.

Superdry has sold of the rights to its brand in the Far East and extended its loans. It has also been in talks with US investors with the aim of taking the business private.

Restructuring experts have been working with the business and this morning an official plan was announced on the Stock Market.

The company has also announced an equity raise that will provide necessary liquidity headroom during the restructuring process.

The equity raise will be underwritten by Julian Dunkerton, Superdry’s chief executive and co-founder who owns around 26 per cent of shares in the business.

The restructuring plan will also involve the firm’s business rates liabilities.

The restructuring plan will result in:
• rent reductions on 39 UK sites;

• the extension of the maturity date of loans made under the Group’s debt facility agreements with Bantry Bay and Hilco;

• confirmation from Hilco that the conditions to making the seasonal incremental facility described above have been satisfied; and

• material cash savings from rent and business rate compromises over the three year period of the restructuring plan.

The group’s suppliers, employees and landlords of sites outside of the UK will not be affected by the plans,
A statement said: “Given the material changes to the company’s business envisioned under the new target operating model, the company considers it best to implement these changes away from the heightened exposure of public markets. In addition, the company believes it can achieve significant annual cost savings from the delisting that will contribute to delivering its target operating model.”

Peter Sjӧlander, Superdry chairman, said: “The board has spent a lot of time engaging with Julian Dunkerton to come up with a plan which gives the business the best possible prospects for the long term while protecting the interests of shareholders and other stakeholders to the greatest extent possible.

“The business has faced extraordinary external challenges and, while good progress has been made on our cost saving initiatives, more needs to be done to get the business on a stable financial footing for the future.

“We believe that the proposed Restructuring Plan, combined with the Equity Raise fully supported and underwritten by Julian, is the best way to achieve this, together with a delisting which would further reduce costs and enable the business to progress the turnaround. 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.”

Julian Dunkerton added: “Today’s announcement marks a critical moment in Superdry’s history. At its heart, 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.”