Two of Britain’s most iconic retailers were amongst the biggest fallers on the London markets on Tuesday, amid a string of exits and scramble to safeguard their futures.
Shares in Superdry tanked by over 33 per cent following an announcement by the company that it would bid adieu to the public market as part of a scramble to stay alive.
Its exit, which is part of a three year restructuring plan, marks an end to a near 15 year tenure of the London stock exchange, and is just one of many measures it is taking to ensure its future.
Founder Julian Dunkerton – who has previously floated the idea of a delisting – described the move as “putting the business on the right footing to secure its long-term future”.
The businessman, who holds a 26 per cent stake in the company, said: “I am aware of the implications for all our stakeholders and I have sought to protect their interests as much as possible in the proposals we are announcing today.”
Superdry will cut rents on 39 of its 94 stores as well as raising money through the sale of new shares.
The equity raise will be carried out by the founder who said he would pay £10m of his own cash to fund the scheme.
Dunkerton, who resigned from the board before returning in 2019 to “steady the ship,” believed the business would go into administration if he did not take these measures.
He said: “Today’s announcement marks a critical moment in Superdry’s history. At its heart, these proposals are putting the business on the right footing to secure its long-term future following a period of unprecedented challenges.”
While its choice to delist will deliver another blow to the London market, its rescue package throws a lifeline to Superdry’s 3,000 employees and the wider British high street.
Russ Mould, investment director at AJ Bell, said: “Once something of a market darling as it rode a wave of consumer demand for its faux-Japanese stylings, Superdry has been firmly out of fashion with investors and is set to delist as part of a rescue plan which will see landlords take some of the pain.
“Under the proposals, with CEO and founder Julian Dunkerton leading a fundraising effort, the company will cease trading on the London stock market from July. Currently changing hands for little more than 5p, at its 2018 heights the shares traded around £20.”
“The hope will be that the company can restore its ailing brand to health out of the glare of the public markets.”
In the six months to October 2023 sales in Superdry fell by 23.5 per cent to £220m, with the group blaming customers’ closed wallets and unseasonable weather for the dip.
But Peter Williams, former chairman of Superdry between 2019-21, suggested on the BBC’s Today programme that part of its problem is the “brand is probably not as cool as it used to be”.
“That’s the problem – because teenagers don’t necessarily want to shop where their parents used to shop and there is this natural culling of fashion brands that goes on,” he said.
However, Dunkerton told the radio programme: “The reality is that the brand [Superdry] speaks to all human beings – it’s a very broad church and needs to be.
“While you go through the ebbs and flows of brand heat – actually having a diverse customer base is key.”
His comments come as the UK shoppers have witnessed a number of once seemingly indestructible brands vanish from the high street.
In this year alone, the Body Shop and Ted Baker have collapsed, leaving behind a string of empty stores and job losses.
This is not to mention the rapid rise of fast-fashion giants such as Shein and Temu which are enticing a younger audience with their affordable price point and constant churning of new products.
Sticking the boot in
Shares in Dr Martens also fell by 31 per cent on Tuesday after it announced its chief executive Kenny Willison would step down as the company faces a “challenging” year ahead.
The iconic shoe maker said for the year ahead USA wholesale revenue is anticipated to be double-digit down year-on-year.
Declining wholesale orders could impact its profit-before-tax in the 2025 financial year by as much as £20m.
America is one of the business biggest markets but it faced a number of challenges in the region, including the hangover from bottleneck issues in its Los Angeles warehouse.
Aberdonian Kenny Wilson will step away from the top job after six years to be replaced by business’s chief brand officer Ije Nwokorie.
Nwokorie – who joined as a non-executive director- will now be tasked with steering the ship.
It comes after an investment firm, which owns roughly five million shares of Dr Martens, wrote to the board last month and suggested the company would perform better as a private company or as part of a larger, multi-brand holding company.
New York based Marathon Partners Equity Management, LLC argued the company’s stagnant growth and 83 per cent slide in share price since its IPO three years ago have not valued the company at its true worth.
Jonathan De Mello, founder of JDM Retail, said: “Retail has again hit the headlines recently given the recent travails of Superdry and Dr Martens – who have seen their share prices tank as a result of consistent under-performance.
“However, with inflation finally abating, the bulk of the sector – battled hardened after first COVID and then the cost of living crisis – continues to perform relatively well. “
He added: “Some of the better managed retailers – such as Next, Frasers Group, Primark and Inditex – have thrived despite a tough economic backdrop, which is testament to how well managed these businesses are.
“Given recent wage and business rate increases in April, continued careful cost control is critical throughout 2024. This includes actively managing the store portfolio to ensure stores are the right size, in the right place and at the right rent.’
