Superdry confirms proposed restructuring plan, possible delisting on horizon

Amid heightened speculation surrounding its future, Superdry has outlined its proposed restructuring strategy as part of the company’s broader ongoing turnaround plan aimed at delivering a more financially sound operating model.

The struggling retailer said that C-Retail Limited, a wholly owned subsidiary of the company which owns the leasehold portfolio for the Superdry Group, is behind the launch of the restructuring, which comes alongside plans for a new equity raise targeted at securing liquidity headroom.

In the regulatory filing, the company said the plan consists of measures “needed to allow Superdry to return to a more stable footing, accelerate its turnaround plan and drive it towards a viable and sustainable future”.

If not applied, Superdry noted that it would need to enter administration alongside the group’s other subsidiaries or enter an equivalent insolvency process, which would leave creditors “materially worse off”.

Targeted operating model with UK-based rent reductions

One of the three steps in the strategy involves leasehold obligations and property-related liabilities, with Superdry expected to have carried out “rent reductions” on 39 UK-based sites once the restructuring plan is complete. Superdry noted that employees, suppliers and landlords outside of the UK and impacted locations are not to be affected.

Further moves to be carried out include improving product ranges, reallocating marketing spend, building a more efficient operating cost base and improving promotional strategies, all with the goal of returning the retail channel to positive like-for-like revenue growth.

Under this same phase, Superdry is further hoping to secure an extension of the maturity dates of loans made under its debt facility agreements with Bantry Bay and Hilco, the latter having recently agreed to provide two incremental facilities for an aggregate amount of 20 million pounds – conditional to cost saving measures.

To build on this, the company has announced a proposed equity raise to provide additional funding, which will be structured either as an open offer at one pence per share to raise proceeds of up to eight million euros or as a placing of five pence per share, with gross proceeds amounting to 10 million pounds.

The former would see existing shareholders retain their pre-emption rights, while the latter would only be open to founder Julian Dunkerton, who has said that he will vote in favour of all resolutions proposed at the general meeting.

Delisting to likely go ahead

Continuing in the discussion of a potential delisting, the topic of which has been circulating for over a year, Superdry has now said that in light of the restructuring plan, it felt it was best to implement its restructuring proposals “away from the heightened exposure of public markets”.

As such, the retailer confirmed it was intending to make applications to cancel its listing of shares on the London Stock Exchange in a move that it claimed could help to “achieve significant annual cost savings” to contribute to the delivering of its target operating model.