A MAJOR fashion brand is in talks with the firm behind Laura Ashley in a bid to rescue the troubled business.
Superdry’s chief executive Julian Dunkerton is in talks with Rcapital and Gordon Brothers about a bid to take the embattled British fashion retailer private, Sky News reported on Friday.
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It comes just days after the troubled fashion brand said it is looking at various “cost-saving options” after reports it is considering a major restructuring which could include store closures and job cuts.
Both firms specialise in investments in financially challenged firms and Gordon Brothers helped rescue Laura Ashley from the brink of collapse.
The homeware brand was rescued by the firm in April 2020 and still operates in 48 Next stores across the country.
Gordon Brothers has also helped liquidate big brands that previously filed for bankruptcy in the US – including Bed Bath & Beyond and Hollywood Video.
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However, the talks are not yet at an advanced stage and people close to them cautioned that they may yet fall apart, according to Sky News.
The report comes hours after the London-listed company said Dunkerton, who is also its top shareholder, is considering making a cash offer for the shares he does not already own, among other options.
Superdry, in its statement, did not mention speculation about an outside takeover, only referring to a potential cash offer by Dunkerton, possibly with financing partners.
In a statement on Friday responding to a spike in its share price, Superdry said: “Julian Dunkerton has… confirmed… that he is engaged in discussions with potential financing partners for the purposes of considering options in respect of the company, which may include a possible cash offer for the entire issued and to be issued share capital of the company, not already owned by him.
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“These discussions are at a preliminary stage and no decisions have been made.”
Last week, Sky News reported that Superdry is working with PwC advisers on a plan that could lead to a CVA (company voluntary arrangement) or another form of restructuring.
Such a move could result in store closures and potentially force through rent reductions with landlords.
On Monday, Superdry told the stock market: “In line with the company’s turnaround strategy, the company confirms it is working with advisers to explore the feasibility of various material cost-saving options.
“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.”
The firm recently revealed a sharp slump in sales over the half-year to October and warned shareholders its fortunes could still take some time to turn around.
The clothing firm said that its revenue had fallen by nearly a quarter (23.5%) to £219.8 million in the six months to the end of October, with adjusted loss nearly doubling to £25.3 million.
The retail business, which employs around 3,350 globally, said it also cut around £20 million in costs over the half-year and is on track for over £40 million in savings for the current year.
This saw the business close 12 stores over the first half of the financial year, taking its estate down 216 owned stores – 96 of which are located in the UK.
The company also runs shops through franchisees.
Chief executive Julian Dunkerton said: “Christmas trading proved challenging, and we do not expect market conditions to get any easier in the near term.
“This has clearly been a difficult period for Superdry.
“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.”
The Sun has contacted Superdry for comment.
In August 2023, Superdry secured up to £25million in funding from Hilco Capital.
The business said the extra funding would help accelerate its £35million cost reduction programme, announced in April.
Last year, Wilko was considering entering into a CVA, it then shuttered all 400 of its shops after falling into administration.
Back in 2019, card shop Clintons reported it was considering a CVA, it then told landlords it urgently needed to close 66 stores.
Mothercare carried out its first CVA in 2018, this resulted in a plan to close 55 shops – putting 900 jobs at risk.
Shoe shop Office also considered entering into a CVA amid struggles.
In 2020, coffee chain Caffe Nero launched a CVA to restructure its business and avoid store closures and job losses.
Retailers have been feeling the squeeze since the pandemic while shoppers are cutting back on spending due to the soaring cost of living crisis.
High energy costs and a move to shopping online after the pandemic are also taking a toll and many high street shops have struggled to keep going.
The high street has seen a whole raft of closures over the past year and more are on their way.
Several major brands have also collapsed, such as Wilko and Paperchase.
Many etailers have been struggling to get by, especially during the Covid-19 pandemic.
Energy costs have risen and more shoppers than ever are choosing to order online rather than head into stores.
This has left some retailers grappling with budgets and have no choice but to close stores to cut costs.
British retailers saw the amount of goods they sold drop last month at its fastest rate in three years as under-pressure families shifted part of their Christmas shop to earlier in the year.
Sales volumes dipped by 3.2% in December, data from the Office for National Statistics suggests, down from a rise of 1.4% a month before.
Several big-name chains are pulling down the shutters for the final time this month.
Lidl will be pulling the shutters down on its site in Thornaby next month.
The bargain retailer has confirmed the site in Stockton-on-Tees will shut on February 29.
Boots revealed it would be closing 300 stores over the next year as part of plans to evolve its brand.
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Shops aren’t the only ones affected, major burger chain Byron Burger also fell into administration and closed nine restaurants immediately last year.
Plus, a major fast-food outlet with 1,000 restaurants is shut one of its branches for good last month.
