Fashion retailer Superdry is reportedly making preparations for an emergency four-week sale process in the event that its founder’s plans to inject up to £10m of his own money into the company are blocked by creditors.
According to sources familiar with the matter, the accelerated M&A process would be initiated if a proposed restructuring plan is not approved by creditors in the upcoming weeks.
Under the survival plan put forth by founder Julian Dunkerton, he would contribute either £8m through an open offer available to other shareholders, or £10m through a placing exclusively available to himself. This share sale would take place before Superdry’s delisting from the London Stock Exchange.
The restructuring plan, which aims to prevent insolvency, must be approved by creditors, including landlords, within the next few weeks. Failure to do so would result in a four-week sale process for Superdry, with the likely outcome being a pre-pack administration deal.
Sources indicate that Mr Dunkerton’s willingness to inject a significant amount of his own money into the company reflects his confidence in its potential for turnaround. Superdry’s shares have been on a downward trend in recent months, with poor trading performance and a failed sale process contributing to record lows.
Last month, it was reported that M&G, the asset manager that owns Superdry’s flagship store in central London, was considering challenging the company’s rescue plan. The asset manager was reportedly concerned by its exclusion from a mechanism that would allow creditors to benefit from any future recovery in the retailer’s performance.
While the restructuring plan does not involve immediate store closures, it does entail substantial rent reductions for landlords of several Superdry outlets. The company also plans to withdraw from certain international markets, including the US.
As of Tuesday morning, Superdry’s shares were trading at around 6.7p, giving the struggling company a market capitalisation of less than £7m. The company recently secured increased borrowing capacity from existing lender Hilco Capital, and also owes tens of millions of pounds to Bantry Bay.
Mr Dunkerton, who returned to the company in 2019 after being ousted, currently owns just under 30% of its shares. In recent months, Superdry has generated cash by divesting its brand in regions such as India and Asia-Pacific.
When approached for comment, Superdry declined to provide a statement.
