Superdry, the British fashion retailer, has put forth a rescue plan to avoid administration. This proposal, spearheaded by CEO Julian Dunkerton, entails fundraising, departure from the London Stock Exchange, and a comprehensive restructuring strategy.
The success of the restructuring plan hinges on the completion of the equity raise, which is contingent upon obtaining approval from shareholders.
Superdry’s share trading experienced a brief suspension following a significant drop early on Tuesday, prompted by the company’s cautionary statement regarding potential administration if the plan failed to materialize. The shares were last recorded at a 33% decrease, trading at 5.36 pence, marking an 84% decline for the year.
The rescue strategy, aimed at securing significant cash savings through rent cuts at 39 out of Superdry’s 94 stores in the UK, along with extending the maturity of loans from the group’s debt facility agreements, arrives amidst the company’s struggle with diminished demand and financial constraints.
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“This plan is the best course for all stakeholders, focusing on achieving the right size,” Dunkerton stated.
The 59-year-old, who co-founded Superdry in 2003 and holds the largest share, announced last month that he won’t be making an offer for shares beyond those he already possesses.
Dunkerton has fully underwritten an equity raise offering two options: an open offer aiming to raise the sterling-equivalent of 8 million euros ($8.49 million) or a placing to raise gross proceeds of 10 million pounds ($12.45 million).
Dunkerton also mentioned that there are currently no plans to return to a public listing in the near future.
Known for its jackets and clothing inspired by American vintage styles and Japanese graphics, Superdry acknowledged that trading conditions continued to remain challenging.
In recent years, its popularity has waned as it grapples with the challenge of attracting younger shoppers despite ramping up its marketing endeavors. In a similar vein, Ted Baker, a prominent brand in the UK, succumbed to administration last month, revealing plans for store closures and workforce reductions.
“The expectation is that the company can rejuvenate its struggling brand away from the scrutiny of public markets,” commented Danni Hewson, an analyst at AJ Bell.
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