Superdry to slash rents on 39 stores in restructuring plan
Superdry is to cut rents on 39 of its stores under a restructuring plan described by the retailer as a “key element” of its turnaround.
The proposals would also “compromise” Superdry’s business rates liabilities, and affect amendments to its existing debt facility agreements with its principal lenders, Bantry Bay and Hilco.
Superdry said the restructuring plan is expected to produce material cash savings from rent and business rates reductions over a three-year period.
The clothing retailer said that should the restructuring plan not come into effect, it would need to enter into administration or an equivalent insolvency process.
Superdry is also set to undertake an equity raise worth up to £10m, supported and underwritten by its co-founder and CEO Julian Dunkerton.
The retailer also announced its intention to delist from the London Stock Exchange, where it has traded since 2010.
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.”
In January, Superdry called in advisers from PwC to explore its financial options, following a pre-Christmas profit warning.
In a trading update released just before Christmas, Superdry had blamed milder-than-expected Autumn weather for lower sales. The results had capped off a year in which the retailer had undertaken a number of measures to strengthen its balance sheet.