- Indebted fashion brand confirms refinancing talks
- Elliott-backed Bantra Bay could bankroll rescue
- Shares down 55% year-to-date as cost-of-living crisis bites
Shares in Superdry (SDRY) cheapened 5.2% to 120p after the premium clothing and footwear brand confirmed press speculation that is in talks to refinance borrowings of up to £70 million with Bantry Bay Capital, a specialist lending provider backed by US activist investor Elliott Advisors.
In its full year results statement last month (7 October), the apparel retailer famed for its hoodies and jackets warned a ‘material uncertainty’ exists around the going concern of the group with a £70 million loan facility set to expire at the end of January 2023, although management remained ‘confident of a positive outcome’.
BANTRY BAY TO THE RESCUE?
In a short statement, Superdry confirmed that it is in negotiations with Bantry Bay Capital to ‘replace the existing up to £70 million asset-backed lending facility’.
However, the retailer warned there is ‘no certainty that an agreement will be reached, nor as to the terms of any such agreement and we remain in discussions with other lenders. A further announcement will be made as and when appropriate.’
Over the weekend, The Telegraph cited City sources as saying that talks with Bantry Bay had reached an advanced stage and Superdry was hopeful that a deal could be agreed as early as this week.
SUPERDRY FACES STIFF HEADWINDS
Steered by charismatic co-founder and CEO Julian Dunkerton, Superdry returned to profit in the year ended 30 April 2022, swinging from losses of £12.6 million to adjusted pre-tax profits of £21.9 million.
Total revenue rose 9.6% year-on-year to just under £610 million as shops reopened again after the pandemic. While the retailer flagged an ‘encouraging’ start to the new financial year, Superdry faces stiff headwinds from the surging inflation which is denting consumer confidence and crimping shoppers’ purchasing power.
In the recent results statement, Dunkerton insisted Superdry is ‘a premium, affordable, brand, which should mean we are well-positioned as customers think more carefully about their purchases. That said, given the current challenging conditions, we continue to run the business prudently while remaining focused on delivering our strategic goals.’
