Superdry slumps as founder's return sparks board revolt
today Apr 3, 2019
Shares in Superdry Plc fell more than 11 percent on Wednesday after founder Julian Dunkerton narrowly forced his way back into the company, which sparked the exit of most of its board members, including top executives.
Dunkerton, the former boss of Superdry, on Tuesday was voted back on the board by a slim margin and hours later was named interim chief executive officer after winning the backing of shareholders looking for a revival of the fashion group's fortunes.
The move did not sit well with most of Superdry's board, which had opposed his comeback. Chief Executive Officer Euan Sutherland immediately resigned after five years at the helm.
Dunkerton, who owns 18.4 percent of the equity, quit a year ago after a row over strategy. He takes issue in particular with Superdry's product design and internet plans.
Analysts said the resignations raised fears of more departures as the company deals with a share price that has dropped 64 percent over the past year following several profit warnings, the latest in December.
"We would be more concerned if we see further significant departures from the retail board and operational management teams and view the recruitment of a heavyweight CFO as a priority," Peel Hunt analysts said.
Analysts also said short-term disruptions were inevitable as Dunkerton steadies the ship and starts to enact his recovery plans, which will tack on costs as the company tries to jump-start revenue.
Superdry's board had accused Dunkerton of a lack of transparency with shareholders and said his return would be damaging and disruptive. The board warned that his return would see directors either resign or not seek re-election.
"The resignation of the entire board of Superdry and its two brokers following co-founder Julian Dunkerton's narrow victory vote yesterday to return as CEO, monumental as it may be, is really only the tip of the iceberg where necessary change is concerned," Edison Investment analyst Kate Heseltine, said.
Analysts said Superdry will need to provide a clear view of the future to investors.
"From here the hard work begins to turn around the fortunes of this once darling retailer that has seen its sales and profits, and the share price, plummet over the past year," Heseltine said.
UBS and Investec also left as brokers to Superdry.
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