Superdry said it remains in discussions with its co-founder in respect of “alternative structures”, including a possible equity raise fully underwritten by Julian Dunkerton as the bid has come to an end.
The retailer suggested this would provide additional liquidity headroom for the its turnaround plan, however GlobalData’s associate apparel analyst Alice Price told Just Style this “would not be enough to execute a turnaround of the ailing fashion brand”.
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Price believes Superdry’s future is looking extremely uncertain and added: “This suggests the business is experiencing significant struggles, with substantial funds likely needed to bring the retailer back to relevance, which prospective investors may be reluctant to commit to.”
Superdry explained that it would expect that any equity raise “would be at a very material discount to the current share price, require shareholder approval of a Rule 9 waiver (as referred in Note 1 of the Notes on Dispensations from Rule 9 of the Code) and be conditional on a de-listing of the Company”.
It added that a further announcement will be made “as appropriate” and there can be “no certainty that a transaction with Julian Dunkerton will be agreed”.
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The retailer has also announced that it has agreed an extension and increase to its secondary lending facility with Hilco Capital Limited (Hilco) that is said to provide the company with “improved liquidity headroom necessary to help facilitate the implementation of its turnaround plan and cost reduction programme”.
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By GlobalDataThe Hilco Facility is to be extended by six months to 7 February 2025 and will see an additional £10m ($12.57m) made available immediately and a further £10m available for the working capital peak between September and November, subject to the approval and implementation of cost saving measures.
Superdry’s existing asset backed lending facility with Bantry Bay Capital Limited (Bantry Bay) remains in place.
The note also confirmed that Dunkerton was working with possible investors on the company’s cash offer. However, it added that the talks were at a preliminary stage and no decisions had been made.
The announcement followed Superdry confirming it was exploring cost-saving options to turn around its financial struggles.
At the time, Price told Just Style that Superdry’s woes largely began after co-founder Dunkerton’s initial departure in 2018 and have continued despite his return in 2019, with the company losing 80% of its value.
Price said: “Superdry remains blighted, having struggled to modernise its product offering and align with current trends. As acting CEO with a 20% stake in the business, Dunkerton’s influence has yet to deliver results for the struggling brand.”
