Superdry: Plans to raise equity boost share price as it attempts to trim £35m costs
Embattled fashion brand Superdry is in “positive discussions” with investors for a 20 per cent equity raise as it looks to improve its balance sheet in the wake of tough trading – hiking its share price by 0.58 per cent.
The news came in response to media speculation that Julian Dunkerton, chief of the company, was in advance talks to raise £15m to improve Superdry’s performance, following reports last month that it would cut costs by more than £35m due to low consumer spending.
In a bid to keep the business afloat, Superdry also recently offloaded the intellectual property of its Asia-Pacific arm to South Korean retail group Cowell Fashion Company to raise £34m.
“Julian Dunkerton, the company’s founder and chief exectuive, intends to significantly participate in the equity raise and provide a material underwriting commitment, reflecting his confidence in the long-term prospects of the business,” Superdry told investors this morning.
Superdry and supply chain savings
It comes as Superdry posted a £17.7m loss in the first half of the year, with the retailer warning that the “remainder of the year is uncertain”.
Emma Carr, a retail partner at the law firm, Gowling WLG, said: “News of this potential equity raise comes on the back of Superdry pledging to make cost savings of £35m by the end of 2024 – which might seem ambitious for some, but for a business with Superdry’s global supply chain footprint and combined expertise, it is perhaps not unrealistic, provided a targeted approach is taken to streamlining its costs.
“Likewise, supply chain and logistical contingencies savings could also be made by the brand by forensically examining its supply chain relationships and identifying whether certain suppliers should be removed or replaced in a way that reduces costs – as well as bringing more efficient and valuable supply partners into the process.”
She added: “However for such cost savings to be achieved, Superdry will need to be ready to review and adapt to the various strands of its programme as and when necessary if it is to remain on track and target with its ambition.”