Superdry Secures New Financing as It Continues Turnaround Plan
Superdry has secured new financing as it hopes to continue to improve its business.
On Monday, the U.K.-based retail chain said in a regulatory filing that it had obtained a secondary lending facility of up to 25 million British pounds ($32 million, based on current exchange) with Hilco Capital Ltd., a subsidiary of the U.S.-based group Hilco Global.
In the filing, Superdry said that the new funds will improve its liquidity and will help accelerate the implementation of its turnaround plan and cost-reduction program.
The company added that the facility with Hilco is for a 12-month term with the option to extend and is at an interest rate of 10.5 percent plus the Bank of England base rate on the drawn element.
The agreement follows multiple initiatives from the retailer to strengthen its balance sheet.
In December, the company inked an 80 million pound ($102 million) asset-backed lending facility with Bantry Bay Capital Ltd. This facility replaced the existing 70 million pound ($89 million) asset-based lending facility obtained in 2020, which was due to expire at the end of January 2023.
In March, the company went a step further, agreeing to sell its intellectual property assets in certain countries within the Asia Pacific (APAC) region for $50 million. Shortly after this move, Superdry issued a trading update on its fiscal 2023 outlook in April, which included the announcement of its turnaround plan.
In the plan, the company said it had identified initial cost savings of over 35 million pounds ($45 million). These will be achieved through estate optimization, logistics and distribution savings, better procurement and continued range reduction, Superdry noted in the plan.
The company expects these savings to be fully realized by the end of fiscal 2024, with the costs to achieve them primarily incurred in calendar year 2023.
“The Superdry brand continues to evolve, but there is no doubt that the market conditions we face are challenging, compounded by the issues we have previously disclosed and are working to address in wholesale,” founder and CEO Julian Dunkerton said in a statement in April. “As a result, while we continue to deliver like-for-like growth in retail sales, we need to ensure our business is in the right shape to navigate these difficult times, which is why we are looking hard at our cost base.”
In May, Superdry completed a 12 million pound ($15 million) equity raise to help fund its turnaround plan. As part of the raise, 11.1 million ($14.2 million) came through the sale of 15.7 million new shares, equating to 19.1 percent of the company’s equity.
In its most recent guidance, Superdry expects fiscal 2023 revenue to be in the range of 615 million pounds ($786 million) to 635 million pounds ($812 million), up from 609 million pounds ($779 million) last year.