Superdry founder Dunkerton has considered deal to take retailer private again

By

Sandra Halliday

Published
Dec 12, 2022

Julian Dunkerton has reportedly considered a buyout offer for Superdry, the retailer he co-founded and currently leads. He’s believed to have held talks with private equity firms about the possibility of a deal as the share price of the stock exchange-listed business continues to struggle.

However, whether a takeover would actually happen remains open to question. Sources close to the business said there were no “active talks” on a deal to take it private and no advisors had been appointed for a potential sale. 

That’s all according to the Sunday Times, which also said the retailer declined to comment on the report.

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The newspaper claimed talks have taken place this year and would see Dunkerton, who has a 23.9% holding in the business, rolling his stake into a new private vehicle that would own the fashion retail and wholesale business.

A source close to the talks told the newspaper that they’d come as Dunkerton thinks the share price is “super cheap”.

So how cheap is it exactly? The shares closed at 105.5p each on Friday, giving the company a market capitalisation of less than £87 million. 

The shares have been listed on the London stock exchange since 2010, and while they’ve seen ups and downs in the intervening 12 years, for most of that time they’ve had a fairly high value. 

Like Ted Baker (now privately owned), Superdry was once a stock market darling and at the start of 2018, the shares were changing hands for more than £20 each. But, again like Ted Baker, the company faced a number of problems and the share price value started to decline even before the pandemic. Once Covid hit, the shares fell to a low of 109p shortly after the first lockdown was announced in 2020. But despite rising from there and reaching more than £4 each in June 2021, they’ve continued to decline since then to their current lowly value.

However, following the report in the Sunday Times, the shares traded early on Monday at 106.6p. That was a rise of less than 2%, valuing the business at £88 million. While the rise was clearly welcome, the small size of the jump appears to reflect that fact that the buyout talks aren’t currently active.

As mentioned, nothing appears to be happening around a potential buyout at present and the newspaper said that Dunkerton is wary of any deal that would add to the Superdry debt load. Another hurdle would be activist investors that own almost 5% of the shares.

Regardless of what happens, the retailer appears to be on a recovery trajectory with the year to April 30 seeing a pre-tax profit of £17.9 million on sales of £609.6 million. However, one big issue is a ‘going concern’ warning with the retailer having not yet agreed an extension of its £70 million asset-backed lending facility. That facility expires at the end of next month.