Another trendy brand is on the verge of bankruptcy.
The popularity of Superdry in China is not too high, because SuperDry is also known as "extreme dryness", many people's first reaction when they hear Superdry is often, "Which country's brand is this?" ”
As a local British fashion brand, Superdry also opened a branch in China, but the fate of most foreign brands is about the same, and they have to withdraw from the Chinese market. The same is true for Superdry, which has been underperforming since entering China in 2016, having 25 self-operated stores and 41 franchised stores. Four years later, coinciding with the epidemic, it finally withdrew from China in 2020, and the official reason given was that "due to the impact of the new crown epidemic, it will temporarily leave the Chinese mainland market".
Note that this reason is important to Superdry, and every time the company expresses its poor performance to the outside world, similar reasons for the bad environment will appear frequently.
So, when Superdry was rumored to be on the verge of bankruptcy today, the company still said it was all because of "unusually mild autumn weather" that led to weak sales and a drop in stock price to a record low. To sum it up in one sentence, it is the weather, and the property that broke me is all caused by the weather.
Of course, it's not that simple.
Because the weather is not cold enough, because the customers have no money
First of all, a brief introduction to this trendy brand: Superdry sells winter clothes.
The news about the imminent bankruptcy comes from foreign media Sky News, Superdry is considering a thorough restructuring after announcing the news of continued weak sales in the recent financial report, which may involve a large number of store closures and layoffs.
Sky News revealed that Superdry and its advisers at PricewaterhouseCoopers (PWC) are initiating schemes that could lead to a voluntary arrangement of companies (CVA) or restructuring plans, both of which are bankruptcy mechanisms that allow businesses to reduce their liabilities to creditors.
A Superdry spokesperson declined to comment on PwC's role or any restructuring plans, but later released a statement to the market saying: "In line with the company's transformation strategy, the company confirmed that it is working with consultants to explore the feasibility of various material cost savings options." While none of these options can be determined whether progress has been made, they are designed to build on the success of the cost-saving initiatives that the company has implemented to date and set the business up for long-term success. ”
According to Superdry's official report, its FY23 statutory after-tax loss was 1£48.1 billion against a statutory profit after tax of £22.4 million in FY22. Its basic loss per share for FY23 was 1813p, compared to a profit per share of 27 in FY224p.
The poor situation and frequent decline in stock prices have almost been the main theme of Superdry in recent years. At the end of 2023, the company blamed the weak sales on unusually mild autumn weather.
Weather reasons have always been used by Superdry to talk about. In its Jan. 26 announcement, the company reiterated that "the consumer retail market remains challenging and unavoidable, with extreme weather events in the summer and one of the warmest autumns on record, continuing into the peak Christmas trading period, not helping sales performance." "So due to the bad weather, in the 26 weeks to October 28, it led to the group's revenue of **235%。
It is also worth mentioning that in addition to "unstable weather" as the official reason for Superdry, "the pressure on customers due to the high cost of living" is also the main reason for its sales**; In other words, because consumers have no money and can't afford to buy superdry clothes, the company can't make money - this reminds me of Li Mouqi's eyebrow pencil hot search last year, "Who is to blame for your lack of money?" ”
Well, Superdry is still lucky, as early as 2020, it withdrew from the Chinese market and also withdrew from the Chinese ** zone.
The market capitalization fell from 18 billion to 1800 million
Superdry was founded in 2003 because the brand added Japanese street style, which is often mistaken for a Japanese brand. Aside from the underestimated period in recent years, Superdry has also been brilliant, such as David Beckham, Jude Law, and Kate Moss, who will regularly appear at Superdry's press conference.
In March 2010, the company was officially listed on the London ** Stock Exchange at an issue price of 500p on the same day. In 2015, due to differences of opinion with the board of directors, founder Julian Dunkerton stepped down as CEO and left the board of directors completely in 2018. However, he still won with 18The 5% shareholding ratio maintains the position of the largest shareholder.
In April 2019, Dunkerton returned to the company and ousted former CEO Euan Sutherland, claiming that extreme dryness was on a "completely wrong track" and that he could not sit idly by and watch his "30 years of hard work" fall into recession.
At the time, Superdry's share price was around 450p a share, and after Dunkerton's return, it was rumored that he was in talks with private equity ** to privatise Superdry.
It would have been too simple to think that the company was already in an extreme trough and wanted to save the whole company by himself, because Superdry's share price was almost miserable in the following years, and today it has fallen to about 20 pence shares, with a market value of about 20 million pounds (about 1 yuan).800 million yuan).
At its peak, Superdry's market capitalization reached a maximum of 2 billion pounds (about 18 billion yuan), which was in 2018. In just 5 years, the company's market value has almost completely evaporated.
Interestingly, after Dunkerton's return, he said that the sluggish weather, changing consumer attitudes and exchange rate fluctuations were not the main reasons for Superdry's sluggish performance, but that the root cause was the wrong strategic decision, "It was a mistake to reduce the product line at a time when competitors were ramping up production." ”
But Superdry's board of directors did not support Dunkerton's return, and even the entire board of directors of the company resigned to ** his return, but his arms couldn't twist his thighs, and finally Superdry was destroyed in the hands of the founders themselves.
Led by Dunkerton last year, Superdry embarked on a "cost-effectiveness initiative", a move the fashion retailer said was in line with its transformation strategy and made a "cost reduction agenda" a priority.
The series of plans includes store closures and layoffs, modest equity raisings and brand licensing transactions in Asia Pacific and India, and in October 2023, the company signed a joint venture with Reliance Brands Holding UK Ltd (RBUK) to ** its intellectual property in South Asia.
In addition, Superdry has recently secured debt financing totalling more than £100 million through agreements with Hilco and Bantry Bay Capital.
"As a management team, we will continue to focus on the implementation of our cost-effectiveness programme and the opportunity to further reduce the fixed cost base of the business, with savings of more than £40 million for the year, up from the initial target of £35 million, of which more than £20 million was achieved in the first half of the year." The company said.
"While any of these options are uncertain whether progress has been made, they are intended to build on the success of the cost-saving initiatives that the Company has implemented to date and set the business up for long-term success," the board said. The company has reduced operating costs by 16% in the last six months. ”
The founder once cashed out 800 million yuan
However, at the end of January, Dunkerton finally admitted that "Superdry is going through a difficult time" and did not forget to shake the blame: "Against the backdrop of macroeconomic uncertainty and some obviously unseasonal weather conditions, the challenging consumer retail market combined to weaken the group's financial performance." ”
Charlie Huggins, director of the Wealth Club, said Superdry had no choice but to go under the knife. As of now, Superdry operates 216 stores and approximately 369 franchisees and licensees, with more than 3,350 employees.
In fact, looking back, the turning point of Superdry was the return of founder Dunkerton in 2019, and if Dunkerton hadn't returned, maybe Superdry wouldn't have been as bad as it is today. Ironically, Dunkerton clamored for his return on the grounds that "this board doesn't understand the fashion industry." Three years later, on his own, Dunkerton single-handedly ruined his own efforts.
But then again, maybe Dunkerton is not a good company manager, but he is indeed a good investor, 2018 is almost the best period for Superdry in the capital market, when he made two mistakes **company**, arbitrage nearly 89 million pounds (about 800 million yuan), almost can buy today's 4 Superdry.
I'm curious to know if Dunkerton will regret his return, and whether he will regret not selling all of his ** in the first place.