Troubled clothing retailer Superdry is preparing for a potential fire sale if creditors reject its restructuring plan, according to documents obtained by Sky News.
The plan reportedly hinges on a £10m ($12.72m) cash injection from founder Julian Dunkerton, but if it is blocked, Superdry could be sold within four weeks through a prepack administration process.
According to Sky News, under Dunkerton's proposal, he would either offer £8m in new shares to all shareholders or invest £10m directly.
This would be followed by delisting Superdry from the London Stock Exchange, UK.
Creditor approval, including landlords, is crucial for the plan's success in the coming weeks.
Rejection would reportedly trigger a rapid sale process, likely resulting in a prepack administration deal where a buyer is already identified before entering administration.
This potential outcome highlights the urgency of the situation for Superdry.
Sky News noted that sources close to the company suggest Dunkerton's significant investment reflects his belief in a potential turnaround.
Superdry's stock price has plummeted recently due to weak sales and a failed previous attempt to sell the company.
Additionally, asset manager M&G, owner of Superdry's flagship London store, is reportedly considering challenging the plan due to concerns about creditor benefits in a future recovery scenario.
The desired restructuring plan avoids immediate store closures but seeks substantial rent reductions from landlords across a significant portion of Superdry's locations.
The company is also planning to exit several overseas markets, including the US.
It has secured additional borrowing from existing lender Hilco Capital, but still owes significant debts to Bantry Bay.
Superdry has previously raised funds by selling off its brand rights in regions such as India and Asia-Pacific.
Superdry's future hinges on creditor approval of the rescue plan. If successful, it could pave the way for financial stability and a potential turnaround.
However, rejection could lead to a swift sale process with uncertain consequences for the company and its stakeholders.
