- Dunkerton explores Superdry acquisition
- Talks with Rcapital, Gordon Brothers
- Superdry faces radical reorganisation
Julian Dunkerton, Rcapital, and Gordon Brothers, the owners of Laura Ashley, have begun preliminary discussions about a proposal to take Superdry private.
An investor who previously supported Paperchase and the owner of Laura Ashley are in talks with the founder of Superdry about a potential acquisition of the London-listed fashion retailer.
Regarding assisting in the financing of an offer for Superdry, Julian Dunkerton has begun preliminary discussions with Gordon Brothers and Rcapital, two firms that specialise in investing in financially distressed companies.
The discussions have not reached a critical stage, and individuals familiar with them cautioned that they might still collapse.
Retail Realisations, a company in which Rcapital has invested in several troubled high street chains, is a supported organisation.
Dunkerton Eyes Superdry Takeover
Mr Dunkerton, who was reinstated to the organisation in 2019 after being previously removed, now controls just under 30% of the company’s shares. On Friday, those shares more than doubled in value after Superdry confirmed his interest in a bid.
Following a disastrous period marked by a series of profit warnings and urgent debt and equity offerings, Superdry is currently valued at less than £50 million.
Following its successful fundraising efforts from Bantry Bay Capital and Hilco, the organisation has accumulated over £100 million in debt investments.
“Julian Dunkerton has… confirmed… that he is engaged in discussions with potential financing partners (‘Potential Sponsors’) regarding the company. This may comprise a cash offer for all of the company’s issued and to-be-issued shares, which he does not own. Superdry issued the following statement in response to a surge in its share price on Friday: “
At this stage of the discussions, no definitive decisions have been reached.
It remained unclear whether Mr Dunkerton was being approached by any parties other than Rcapital and Gordon Brothers.
News of his renewed interest in delisting the company has emerged, indicating that, in response to poor sales reports, the company is considering a radical reorganisation that may involve a significant number of store closures and layoffs.
Superdry Considers Restructuring Path
Superdry is consulting with advisors, including PricewaterhouseCoopers, regarding potential plans that may result in a company voluntary arrangement (CVA). A CVA is an insolvency procedure that allows companies to reduce their debts to creditors.
This may be done to close underperforming stores, which would affect employment, or to pressure landlords to lower rent.
Further information is required to develop comprehensive proposals, and it is currently uncertain how many of the company’s 3,350 employees and over 215 stores may be affected.
Superdry disclosed last week that its chief financial officer, Shaun Willis, would resign in March.
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Giles David, with previous experience at McColls, Casual Dining Group, and Wiggle, has been appointed as his interim replacement.
Recently, Superdry has generated capital through the sale of its brand in Asia-Pacific and India, among other regions.
The company blamed abnormally mild autumn weather for slow sales, sending its shares to an all-time low late last year.
Following last week’s trading update, the shares further declined, resulting in a market capitalisation of £16 million.
Superdry issued the following statement last week: “The consumer retail market continues to be challenging and unpredictable, and sales performance has not been aided by the extreme weather events of the summer being followed by one of the warmest autumn seasons on record, which persisted through the peak Christmas trading period.”
We remain aware of these external and systemic factors, and as stated in our December trading statement. We expect that the weaker trading we have witnessed thus far will affect full-year profitability. Internal expectations continue to reflect this outlook.
Managers are committed to pursuing our cost reduction project and finding strategies to minimise fixed costs. We expect to realise savings exceeding £40 million within the current year.
