A MAJOR high street fashion chain is plotting a money-saving restructure in a fresh bid to avoid closing shops.
Superdry has plans to unveil a major restructuring plan to help protect the brand’s future.
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The plan will look to protect the chain’s 96 stores from closure, according to city sources.
It is considering imposing steep rent cuts on many of its landlords to help secure its foothold on the high street.
However, it’s important to confirm that stores could still close in the future.
There’s no guarantee that landlords will agree to proposed rent cuts.
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If they choose not to, they are well within their own right to terminate Superdry’s leases – a move which would result in store closures.
Superdry formally confirmed the news in a statement published on the London Stock Exchange.
It reads: “Superdry plc notes media speculation regarding the possible implementation of a restructuring plan.
“In the company’s announcement on 29 January 2024, it confirmed it was working with advisors to explore the feasibility of various material cost saving options to help position the business for long-term success.
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“Today, the company confirms it is in the advanced stages of preparing a restructuring plan which is expected to launch in the coming days.
“However, there is no certainty that such a restructuring plan will be implemented.”
Retailers opening shops in 2024
In January, Superdry said it is looking at various “cost-saving options”.
The troubled brand was said to be working with advisers at PwC on a plan which could lead to a CVA (company voluntary arrangement) or another form of restructuring.
Such a move could result in store closures and potentially force rent reductions with landlords.
The company’s latest survival bid, which will require the approval of its creditors, comes after discussions about taking the company private fell through.
In February, Superdry’s chief executive Julian Dunkerton discussed a bid to take the embattled British retailer private with the help of Rcapital and Gordon Brothers.
However, the plan was soon aborted, but discussion remains over a potential equity raise.
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 £219.8million in the six months to the end of October, with adjusted loss nearly doubling to £25.3million.
The retail business, which employs around 3,350 globally, said it also cut around £20million in costs over the half-year and is on track for over £40million 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 – 94 of which are located in the UK.
In August 2023, 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.
Why are retailers closing stores?
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 coming.
The number of jobs lost in British retail dropped last year, but 120,000 people still lost their employment, figures have suggested.
Figures from the Centre for Retail Research revealed that 10,494 shops closed for the last time during 2023, and 119,405 jobs were lost in the sector.
It was fewer shops than had been lost for several years, and a reduction from 151,641 jobs lost in 2022.
The centre’s director, Professor Joshua Bamfield, said the improvement is “less bad” than good.
Although there were some big-name losses from the high street, including Wilko, many large companies had already gone bust before 2022, the centre said, such as Topshop owner Arcadia, Jessops and Debenhams.
“The cost-of-living crisis, inflation and increases in interest rates have led many consumers to tighten their belts, reducing retail spend,” Prof Bamfield said.
“Retailers themselves have suffered increasing energy and occupancy costs, staff shortages and falling demand that have made rebuilding profits after extensive store closures during the pandemic exceptionally difficult.”
Alongside Wilko, which employed around 12,000 people when it collapsed, 2023’s biggest failures included Paperchase, Cath Kidston, Planet Organic and Tile Giant.
The Centre for Retail Research said most stores were closed because companies were trying to reorganise and cut costs rather than the business failing.
However, experts have warned there will likely be more failures this year as consumers keep their belts tight and borrowing costs soar for businesses.
The Body Shop and Ted Baker are the biggest names to have already collapsed into administration this year.
