Superdry boss Julian Dunkerton says his proposals are the only way to give the embattled fashion retailer a shot at ‘rebirth’. But is it all too little, too late?
The messaging from Superdry and its chief executive Julian Dunkerton has been crystal clear: back my restructuring proposal or face the business collapsing into administration.
The proposals put forward to save the business call for delisting the fashion brand from the London Stock Exchange, an equity raise underwritten by Dunkerton to provide a fresh injection of cash, and a swathe of cost-reduction measures − including rent cuts across 39 of the brand’s 94 stores and extending the due date of large loans.
In the longer term, Dunkerton has identified boosting product ranges and reallocating marketing spend to target a more diverse customer base as steps forward. But, for the here and now, he says Superdry shareholders need to back his proposals or face the prospect of the brand disappearing.
Despite facing the very real possibility of watching the business he has spent his life building going up in smoke, taking much of his own money with it, Dunkerton, speaking to Retail Week, is full of the enthusiasm and passion for the brand that helped make it a success in the first place.
“I love this company and I believe in this company. I’m putting more money in because I believe in it,” Dunkerton says. “This is the chance at a rebirth of Superdry as an exciting place to be and these proposals will allow me to create that”.
While Dunkerton can see the sunlit uplands for Superdry, trading remains tough and its market value has collapsed.
Since the announcement this morning (April 16), Superdry’s shares have collapsed by 23% and are swapping hands for a little over 5p at the time of writing, compared to trading at more than 500p at their 2018 peak.
Will the proposals he’s put forward win over stakeholders? And five years on from his return to the business he founded, is he still the right man to take Superdry forward?
A private matter
One of the central planks of the restructure would be a move to delist Superdry from the London Stock Exchange in the summer – a move that will need the backing of investors if it’s to pass.
Dunkerton, who owns just under 30% of the retailer’s shares, making him the largest individual shareholder, had been exploring making an offer on the remaining shares to take the company private but was forced to abandon that plan last month.
“Our audit fees five years ago were £1m. Now they’re £5m,” says Dunkerton.
“The reality is that the incumbent costs of running a public company are just too much for us to bear – there is a huge cost-saving element there. But probably more importantly than anything else, it will free me up to focus on the things that really matter: like retailing, creating products, creating a new website and marketing. Those are the things that actually make us money.”
“I’m the biggest investor and I’m trying to do what is best for everybody. It’s really important that everybody votes for this because the alternative is far worse”
Julian Dunkerton, Superdry
Despite plans to take the business private, the wider restructuring plan is still contingent on the fundraising being completed. Superdry has put two options on the table for the raise: an open offer to raise the equivalent of £6.8m or a placing to raise £10m gross.
Does he think investors will back his plans, even though they face the prospect of losing out?
“I’m the biggest investor and I’m trying to do what is best for everybody here,” Dunkerton says. “And it’s really important that everybody votes for this because the alternative is far worse.
“This allows us to move forward. If they don’t vote for it, we can’t move forward. So, this is very much it, let’s get this through.”
Better late than never
When Dunkerton swept back into the brand he co-founded after a boardroom coup in April 2019, he did so on a wave of positive sentiment: the entrepreneurial founder with a close personal connection, riding in to turn around the business’ flagging fortunes – but this narrative never really happened.
Dunkerton can, however, rightly point to having to contend with a historic run of external factors that have limited his ability to restore Superdry to its previous heights.
“The year after I came back we had Covid-19 to deal with and 19 million garments spread across three continents. We’ve had Brexit to contend with on top of that and then there’s been the restructuring of the British retail market between ecommerce and physical retail.
“With the best will in the world, it’s not been the easiest ride”.
While that is true, detractors could say that other fashion brands have had to deal with the same market conditions and have managed to not just survive but thrive.
To hear Dunkerton tell it, the proposals put forward by him will offer Superdry the same chance at change. He cites other brands such as All Saints and Fat Face that have “gone through similar processes and come through the other side as feted success stories”.
“I’m the only man to take the business forward. It’s a complicated business that I started and that I understand”
Julian Dunkerton, Superdry
“We’ve held off [doing this] as long as we can,” Dunkerton adds. “Which is basically following a well-trodden path by other British retailers. I think everybody has done something similar about right-sizing the business and getting our cost base in place so that we’ve got a very positive future, and I can focus on building the brand.
“Remember that we’re virtually the last people on the high street to go through this process and it’s not something that I take lightly. But this is what is going to save the brand and save jobs”.
Dunkerton’s message then is clear: Superdry must adapt or die.
While he insists he has plans to address the retailer’s more existential problems, Dunkerton says those details can wait for another day. The issue facing the brand’s stakeholders now is whether Superdry will live long enough to have the chance.
Given that Superdry has reached this point, does he still feel he’s the right man to take it forward? On that point, as with so much else, Dunkerton is emphatic.
“I’m the only man to take the business forward,” he insists. “It’s a complicated business that I started and that I understand.”
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