Superdry to quit London stock market in huge restructuring

The leader of Superdry has responded to negative feedback claiming that the brand is not as fashionable as it used to be.

Julian Dunkerton replied as the corporation initiated an extensive reorganization initiative intended to guarantee the continuation of the UK vendor.

According to the BBC interview, Mr. Dunkerton stated that the clothing brand was all-inclusive and attracted various kinds of customers.

But, the chain declared a set of actions to reduce costs on the second day of the week. The actions include removing their name from the list of companies on the London Stock Exchange.

The fashion industry manages 216 shops and franchises and has been exploring multiple measures to cut costs due to a challenging year of reduced sales and increased losses.

The company has set out strategies to lower expenses, including exploring options to decrease rental expenses of 39 of its stores in the United Kingdom. Additionally, they aim to generate funds by offering newly issued shares.

Superdry has announced that if it did not proceed with its plans, it would be obliged to declare itself bankrupt.

According to the CEO and co-founder, Mr. Dunkerton, the recent statement is a very important moment in the history of the company.

However, during an interview with the BBC right after the declaration, he expressed his assurance that the steps taken will ensure the protection of the brand's prospects.

In 2003, Mr. Dunkerton and James Holder started a retail business called from a market stall situated in Cheltenham. Their venture saw massive commercial triumph.

Superdry announced on Tuesday that removing itself from the London Stock Exchange will be beneficial for the company in terms of saving money and freeing up Mr. Dunkerton's schedule.

The company stated that the decision would also enable them to execute their restructuring plans in a more secluded environment, away from the intense scrutiny of the public markets. However, the business will require consent from its shareholders to proceed with the proposed restructure plans in their upcoming annual meeting.

The plan is to implement the suggestions by July 2024, as per the current schedule.

During an appearance on the BBC's Today programme, Peter Williams, who used to be the chairman of Superdry, put forward the idea that this decision was a sign that the brand isn't as trendy as it used to be.

"The issue lies in the fact that teenagers are not inclined to shop at stores where their parents used to shop. This leads to a self-regulation process where certain fashion brands are phased out," he explained.

Mr Dunkerton, who had stepped down from the board and later returned in 2019 to stabilize the situation, responded by stating that the brand appeals to everyone and is incredibly diverse, catering to a wide range of people.

He pointed out that having a varied group of customers is very important when facing the ups and downs of brand popularity. He gave Nike's success in the sportswear industry as a good illustration of this.

According to Mr Dunkerton, he will support the equity raise on his own and stated that this demonstrates his dedication "to preserving employment and maintaining this brand that has a remarkable history of success in Britain."

The company's biggest shareholder is a 59-year-old who declared that he won't be making any proposals to acquire shares he doesn't already possess. This announcement was made last month.

He recognized that Superdry's advertising may not be precise in targeting younger customers, as the brand has been attempting to do through influencer partnerships and increased marketing on social media platforms like Instagram and TikTok.

Alice Price, an associate apparel analyst at the research firm GlobalData, suggests that the High Street brand is no longer popular with young celebrities like Justin Bieber and David Beckham. Instead, older men are more likely to prefer this brand because it offers practical clothing options.

She proposed that the primary concern of the company lies in its difficulty in keeping pace with current trends and popular branding on a few of its T-shirts and hoodies, which have gone out of style.

According to Mr. Dunkerton, the company has applied various logo sizes on its different products, catering to the needs of various target markets. Additionally, their baggy jeans and cropped t-shirts with a 90s vibe have been gaining popularity among the younger crowd.

The clothing label, recognized for their jackets and sweatshirts, has experienced a significant decline in their stock value, dropping from a price of 500p to only 5p.

Superdry announced that it aims to remove itself from the stock markets in London to conduct its reorganization "in a more private setting," where it won't be under the increased scrutiny of public markets.

As a component of the recovery strategy, they will also defer the deadline for significant loans and aim to enhance profits by enhancing the variety of their products and redeploying their marketing budget.

The group spent money on collaborating with famous people like Brooklyn Beckham and football superstar Neymar Jr. However, during the six-month period until the end of October, sales decreased by 23.5%, resulting in a total of £220m. This could have been due to consumers having less money to spend and the weather being unusual, making people not want to purchase heavier clothing items.

Numerous merchandisers have faced challenging circumstances due to the impact of Covid on both household finances and the supply chain, adding to the existing burden of rising costs of living.

According to Ms. Price, fashion companies that are struggling to sell their products can learn from Abercrombie and Hollister's successful turnaround. These brands had a hard time getting rid of their outdated style from the early 2010s, but after investing in updating their product range, they have experienced renewed success.

Dr Martens, the popular boot brand, made an announcement on Tuesday that their current leader, Kenny Wilson, would soon be stepping down from his position. This decision comes amidst a difficult year for the company, especially in the United States.

The value of its stocks decreased by about 30% last Tuesday, reaching an all-time low and making the difficulty of Ije Nworokie, the new leader, more challenging.