LONDON — With interest rates high and a cost of living crisis in full swing, the public markets aren’t looking as attractive as they once were — at least for some fashion companies.
On Friday, the British high street chain Superdry confirmed that founder and chief executive officer Julian Dunkerton was seeking a buyer for the troubled company, with an eye to pulling it off the London Stock Exchange.
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The news sent the share price soaring 118 percent to close at 46 pence on Friday.
In a statement, Superdry confirmed that Dunkerton “is engaged in discussions with potential financing partners that may include a possible cash offer” for the entire company. Superdry said the discussions are at a preliminary stage and no decisions have been made.
It added that Dunkerton has until March 1 to make an offer for Superdry, or to announce that he does not intend to make an offer with help from new backers.
First Seagull, a Norwegian fund, had built up a 5.3 percent stake in Superdry, according to company filings. The Times of London reported earlier in the week that the fund is interested in making a bid for the company.
Well before the pandemic, Superdry had begun to see a slowdown in growth. It issued a series of profit warnings over the past year and has been the subject of much management drama, with Dunkerton departing as CEO and then returning a year later following a boardroom shakeup.
He has promised to restructure and cut costs. Last month Superdry said it was set to deliver in excess of 40 million pounds in savings in the current financial year, with more than 20 million pounds of those savings already achieved in the first half, which ended on Oct. 28.
The company said it is continuing to explore further “cost-saving options.”
The macro-environment is working against Superdry, which reported a 24 percent decrease in first-half revenue, and a profit before tax of 3.3 million pounds.
Dunkerton blamed shrinking sales on a “challenging consumer retail market, set against a backdrop of macroeconomic uncertainty and some remarkably unseasonal weather.”
He added that wholesale sales had underperformed in the period following the company’s decision to exit its U.S. operations and sell its brand rights in non-core territories.
Superdry is not the first British retail brand to fall on hard times. Like fellow high street retailers Jack Wills and French Connection, it enjoyed a long period of popularity, but then the audience grew up and moved on.
Similar to Jack Wills and French Connection, Superdry was also crushed under the wheels of international fast-fashion giants Inditex, Uniqlo and H&M Group, which are always iterating and seeking to appeal to different audiences and demographics.
Superdry’s designs are also stuck in the brand’s 2000s heyday when the likes of David Beckham and Kate Winslet wore its vintage-y T-shirts with their mix of Japanese and English lettering.
Dunkerton isn’t the only industry captain to explore taking his company private in hard times. Shares in Farfetch spiked briefly last fall after media speculation that founder and owner José Neves was mulling taking the company private.
Not long after, Farfetch entered pre-pack administration. Coupang purchased it, and injected $500 million to keep it afloat.
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