Under-pressure Superdry names advisors to help it cut costs
Superdry may have seemed to be on a general recovery path, but the road ahead is still a tough one and the company has hired Interpath Advisory to help it cut costs.
It confirmed the move on Friday, weeks after warning on profits as the wider fashion sector continues to face challenging market conditions.
In a statement, the firm said that it has “engaged Interpath to advise us as we work to complete the turnaround of Superdry in today's much changed retail environment, and ensure we have the right cost base and structure in place for future success”.
It hasn’t commented on the details and Interpath has said nothing.
The need to work with the advisory business must be a disappointment for the firm that had looked to be heading in the right direction after a long climb back from a series of weak results. Co-founder Julian Dunkerton had re-taken the helm and launched a strategy to strengthen the brand’s appeal and focus on full-price shopping. He’d also relocated the brand’s flagship from its long-time Regent Street home (a site now occupied by Uniqlo and Theory) to the former Forever 21 location on Oxford Street.
Shortly before Christmas, the company had hailed a “positive start” to AW22 just as its new financing facility has finally been agreed ahead of the previous deal’s expiry that was due to happen early this year.
But in January, while the company reported “strong” Christmas trading, it also said it was “cautious” on the rest of FY23 and issued a profit warning, scaling back its H1 profit forecast to “breakeven” due to weak wholesale and a slow Q1 in Europe.
There’s been speculation that any plan Superdry and Interpath come up with could include job cuts. It’s also likely to include engagement with Bantry Bay, with which Superdry struck the £80 million financing deal in December.
Superdry’s share price fell a few percent on Friday as news of the Interpath link-up emerged. It closed at just over 120p, giving it a market capitalisation of just below £99 million. To put that into context, a little over five years ago, the firm’s share price (and therefore the market value) was more than 17 times higher.
The current issues could add fuel to ongoing speculation that Julian Dunkerton might want to take the business private. Only last month, in a stock exchange statement, the company had said regarding a potential delisting that there are “no plans to do this at the moment”. But it had also added that “Julian Dunkerton and any person(s) acting in concert with him reserve the right to make or participate in an offer for Superdry within the next six months following the date of this announcement”.
Dunkerton is a major Superdry shareholder and in some ways a go-private deal would make sense, allowing the business to focus on its recovery with less of a spotlight on it and without having to worry about the share price.
For now, however, we’ll have to wait and see what further news emerges from the business. There are no results announcements due soon (its interim results were reported on 27 January).
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