Superdry (LSE: SDRY) shares plummeted over 22% in early trading on Tuesday as the embattled retailer unveiled a radical three-year turnaround strategy. The plan involves exiting the London Stock Exchange, slashing store rents, raising up to £10 million through an equity issue underwritten by founder Julian Dunkerton, and implementing cost-cutting measures.
Dunkerton, who holds a 30% stake, stressed the gravity of the situation, stating, “Today’s announcement marks a critical moment in Superdry’s history.” He expressed awareness of the implications for stakeholders but affirmed his commitment to protecting their interests while securing the brand’s long-term viability.
The chief executive, demonstrating his unwavering passion for the “great British brand”, committed to personally underwriting the equity raise. This decision follows previous unsuccessful talks with a US private equity firm regarding a potential rescue deal.
Superdry, grappling with financial difficulties for months, had previously sought to bolster its finances through joint ventures. In October, it sold intellectual property rights for South Asia to Reliance Brands Holding UK, mirroring a similar deal in March with South Korean retailer Cowell Fashion Company for the Asia Pacific region.
Peter Sjölander, Superdry’s chairman, acknowledged the extraordinary challenges faced by the business. While lauding progress on cost-saving initiatives, he underlined the need for further action to stabilise the company’s financial footing.
Sjölander advocated for the proposed restructuring plan, combined with Dunkerton’s equity backing and delisting, as the optimal solution to facilitate Superdry’s recovery.
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