Superdry has urged its shareholders to approve its new restructure plan during its General Meeting, which will take place on 14 June. The company explained that its restructuring plan combined with an equity raise and delisting constitute a key package of measures that it believes are needed to avoid it entering into insolvency.
Superdry decided against a takeover offer last month (April 2024) and instead announced a plan to delist from the London Stock Exchange while raising equity as part of its major restructuring plan to protect stakeholders’ interests and get the company on a “stable financial footing.”
The company believes that once all three elements are brought in together the plan will "allow Superdry to return to a more stable footing, accelerate its turnaround plan and drive it towards a viable and sustainable future."
Superdry pointed out that its restructuring efforts will be based on rightsizing the cost base to provide a platform for future growth.
The process to implement the plan is expected to complete in June 2024, with the sanction hearing for the plan expected to be held on 17 and 18 June.
In the UK, Superdry will focus on its core profitable store estate alongside a refreshed ecommerce approach that aims to deliver a more personalised, customer centric experience. It will have a product portfolio that emphasises "fresh, new designs under a ‘buy now – wear now’ approach and moving away from traditionally segmented seasonal ranges that prove to be commercially challenging".
The company also intends to implement a pricing strategy that moves away from being ‘discount led’ to help deliver improved margins.
Internationally, Superdry will significantly reduce its "cost-onerous store footprint over the next three years," whilst adopting an e-commerce trading strategy similar to the one it will implement in the UK to help grow internationally in this channel.
It also plans to devise and deploy a ‘Go to Market’ strategy by territory that ensures the right blend of profitable sales channels are deployed by market, leveraging ‘expert in-market’ partnering arrangements.
Superdry believes this will result in a simplified wholesale business that focusses on key partners of scale that can deliver cost-effective routes to market.
What will be the impact of Superdry's restructure plan measures?
- The closure of certain stores in the UK as a consequence of the implementation of the restructuring plan, namely the possible termination of certain leases by landlords, as well as the reduction in the number of personnel associated with these store closures
- The reduction in number of administrative and other personnel as a result of the delisting as well as the streamlining of management functions and reporting lines
- Internationally, the reduction of its "cost-onerous store footprint" over the next 24 to 36 months, including approximately 25 to 30 European-based stores already identified for closure over the next 12 months (including a small number which have already closed) and a detailed review of its international footprint to identify additional stores for closure, or a sale of stores to franchisees or other third parties, coupled with headcount reduction associated with these store closures or dispositions
- The implementation of a new third party ecommerce platform to replace its existing proprietary system, which will enable a revitalised and more efficient e-commerce strategy in the UK and internationally
- The pursuit of potential deals relating to its brand and intellectual property in non-core countries, principally to raise additional capital to address its working capital needs.
What will the completed restructuring plan mean for Superdry?
Once completed Superdry said it hopes to see:
- Rent reductions on 39 UK sites.
- The extension of the maturity date of loans made under the Group’s debt facility agreements with Bantry Bay and Hilco.
- Confirmation from Hilco that the Seasonal Hilco Drawdown Condition to making the seasonal incremental facility described above have been satisfied.
- Material cash savings from rent and business rates compromises over the three-year period of the restructuring plan.
Both Superdry's largest shareholder (CEO and co-founder Julian Dunkerton) and independent directors with approximately 0.23% of the company’s issued share capital have "irrevocably undertaken to vote in favour of all of the resolutions."
