A MAJOR fashion brand could close branches amid high street struggles.
Superdry is said to be considering a “radical” restructuring including job losses after reporting poor Christmas sales.
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The designer chain is looking at restructuring options and has approached financial advisors PricewaterhouseCoopers (PwC), according to Sky News.
It is said to be considering entering a company voluntary arrangement (CVA), a form of insolvency.
A CVA is a way for a business to restructure but continue to keep trading, but typically it closes some stores and negotiates rent costs down.
Part of the restructuring could include a “substantial” number of store closures and job losses.
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Superdry has 96 stores in the UK according to its website, and employs 3,350 across the company.
The Sun has contacted Superdry for comment.
It comes after the firm announced plans to close eight of its shops in July last year.
Then in August, Superdry secured up to £25million in funding from Hilco Capital.
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The business said the extra funding would help accelerate its £35million cost reduction programme, announced in April.
This week, bosses warned the company’s fortunes could still take some time to turn around, as the market is unlikely to “get any easier” in the near term, as the business said that Christmas had been challenging.
The clothing firm said that its revenue had fallen by nearly a quarter (23.5%) to £219.8million in the six months to the end of October, with adjusted loss nearly doubling to £25.3million
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.”
Bosses said they were focused on plans to cut costs, with £40million of annual savings planned by the end of this financial year.
But it’s also been reported that the business is trying to drum up loans to help it pay its bills and that it had hired advisers as part of that process.
Directors can propose a CVA when their firm is experiencing difficulties in paying its debts.
It means the company is essentially entering into a legally binding agreement with its creditors, which could include suppliers or landlords.
It can give a company some breathing space or allow it to reorganise or restructure its funding and/or its operations with as little disruption as possible.
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 sites in Stockton-on-Tees will shut on February 29.
Jack Wills in Worcester announced it will be closing down for good on January 30.
Boots revealed it would be closing 300 stores over the next year as part of plans to evolve its brand.
Shops aren’t the only ones affected, major burger chain Byron Burger also fell into administration and closed nine restaurants immediately.
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Elsewhere, one of the UK’s oldest greyhound race tracks has shut its doors after nearly 100 years in business.
Plus, a major fast-food outlet with 1,000 restaurants is shutting one of its branches for good.
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