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Superdry is urging its shareholders to support its Capital and Restructuring Measures. These measures aim to avert potential insolvency and enable the company to “regain stability” while expediting its turnaround efforts.
The recent developments expand upon the strategy previously detailed by the British retailer in April. This strategy focuses on restructuring its UK retail presence, including proceeding with regional store closures and reducing the company’s cost-heavy store network internationally.
It has now been confirmed that this will affect stores based in Europe, with an estimated 25 to 30 locations slated for closure over the next 12 months.
Superdry is additionally planning to introduce a new third-party e-commerce platform to replace its current system, aiming to rejuvenate and establish a more streamlined e-commerce strategy both domestically in the UK and internationally.
European Store Closures: Up to 30 Locations Affected
Further initiatives will be undertaken regarding its product lines, which will now adopt a “data-driven” approach in their development. Additionally, a dedicated design team will focus on creating short lead-time products informed by real-time trends.
Superdry announced its intention to shift away from “traditionally segmented seasonal ranges,” which have posed commercial challenges. Additionally, the company plans to transition from a pricing strategy relying heavily on discounts to delivering enhanced margins.
Ultimately, the company aims for group revenue ranging between £350 and £400 million, with a gross margin slightly surpassing current levels and an EBITDA margin in the mid-to-high single digits.
Another objective is achieving positive like-for-like revenue growth in the underlying retail channel while enhancing operational efficiency and focusing on a streamlined cost base.
Anticipating Approval: Superdry Restructuring Plan Verdict
CEO Julian Dunkerton has proposed the restructuring plan, which is pending creditors’ confirmation. Shareholders will deliberate over the next few weeks on accepting the proposals.
Dunkerton has a history of conflict with his board of directors. He notably resigned as CEO in 2018, only to return a year later amid a significant decline in the company’s share price.
Despite past conflicts, Dunkerton seems highly confident that the board will approve this proposal, as he has committed to underwriting the plan with up to €8 million of his personal funds.
In the event that the board does not support the plan, the company will commence an emergency four-week sale process, which is expected to result in job losses and store closures, according to Sky News.
The scenario bears resemblance to that of another major retailer, The Body Shop, which underwent administration earlier this year and is scheduled for auction this week.
Superdry’s fate hangs in the balance as shareholders weigh the proposed restructuring plan. With the possibility of significant changes looming, including store closures and job losses, the company faces a critical juncture in its journey. Stay tuned for further updates as the situation unfolds.
