Fashion retailer Superdry is seeking “significant” rent reductions at 39 UK sites as part of a new restructuring plan unveiled earlier today.
The company said C-Retail Ltd – a wholly-owned subsidiary of the company that owns the UK leasehold portfolio of the Superdry group – is launching the plan which will “principally involve a restructuring of its UK property estate and retail cost base” to give the business a “more stable footing”.
In addition to seeking rent reductions from landlords, the plan will also “involve the compromise” of the company’s business rates liabilities owed to local authorities.
Superdry has also launched an equity raise to provide “necessary liquidity headroom” and intends to delist from the London Stock Exchange, which will “allow the company to benefit from significant cost savings associated with being listed and implement its turnaround plan away from the heightened exposure of public markets. The equity raise is fully supported and underwritten by Julian Dunkerton, Superdry’s CEO and co-founder.
The company said it has consulted with its principal secured lenders Bantry Bay and Hilco, who have consented to the launching of the restructuring plan and remain supportive of the company.
Superdry added unless the restructuring plan comes into effect, the company “will need to enter administration and other companies in the group will need to enter into administration or an equivalent insolvency process. This outcome would leave creditors, including the creditors whose claims would otherwise be compromised by the restructuring plan, materially worse off than they would be under the restructuring plan”.
Responding to news of the proposed restructure, Simon Morris, managing partner at GCW, said: “Significant expected rental reductions are to be sought as part of the restructuring combined with a regional portfolio that includes towns that are undergoing a transition as they reestablish their purpose. This recipe will create a lot of head-scratching for many landlords – either accept a nominal rent or vote for vacancy. Our expectation would be to take the former but maintain flexibility whilst a new tenant is found.”
