Superdry restructure could mean store closures and job losses
Embattled British retailer Superdry is plotting a major restructuring which could see stores closed and jobs cuts after reporting weak sales.
Over the weekend, Sky News reported that the firm was working with PWC to deliver a turnaround plan, which could lead to a company voluntary arrangement (CVA).
Superdry confirmed reports this morning, telling the London market it is “working with advisors to explore the feasibility of various material cost saving options”.
The board said: “Whilst there is no certainty that any of these options are progressed, they aim to build on the success of the cost saving initiatives carried out by the company to date and position the business for long-term success.”
Today’s developments come one week after the retailer posted a 23.5 per cent decline in revenues during the half year, blaming wet weather for the slide.
But the firm, which has 98 stores across the UK, has been struggling to keep its head above water for months, launching a number of schemes to shore up extra costs.
Back in October, it signed a joint venture with Reliance Brands Holding UK Ltd (RBUK) for the sale of its intellectual property in South Asia, in its latest bid to boost funds.
It mirrored an agreement announced by Superdry in March to sell the intellectual property of its Asia Pacific offering to South Korean retail group Cowell Fashion Company for $50m (£40m).
On Friday, chief of the firm Julian Dunkerton, admitted it was a difficult period for Superdry.
He said: “A challenging consumer retail market, set against a backdrop of macroeconomic uncertainty and some remarkably unseasonal weather conditions have all combined to weaken the financial performance of the group.”
Charlie Huggins, head of equities at the Wealth Club, said Superdry has no option but to take a knife to costs.
“Closing less profitable or loss-making stores makes sense to create a smaller, but more profitable enterprise,” he said.
“However, cost cutting can only go so far. At some point they need sales to start moving in the right direction which will need the brand to be revitalised. That will be a much more difficult task.”