Superdry Share Price Rallied 5.95% on Response to New Rumours

The Superdry PLC (LON: SDRY) share price rallied  5.95% after the fashion company confirmed rumours that it was working on further cost-cutting measures with its advisors. According to a report by Sky News, Superdry is considering shutting down some of its non-performing stores and firing employees working in the stores. 

However, the company noted that the discussions were in their early stages and that nothing was set in stone yet. The fashion retailer noted that it was still implementing its cost-cutting programme and was on track to saving £40 million, which was ahead of its earlier forecast of £35 million in annual cost savings. 

Sources have indicated that Superdry, alongside its advisors from PricewaterhouseCoopers (PwC), is initially developing strategies that might include a company voluntary arrangement (CVA) or a restructuring plan. These are insolvency procedures designed to help businesses manage their debts more effectively.

These potential measures focus on shutting down poorly performing stores, inevitably affecting employment numbers, and negotiating lower rent agreements with property owners. While specific details of the proposed restructuring still need to be finalised, there is uncertainty regarding the extent to which Superdry's workforce of 3,350 and its network of over 215 stores will be impacted.

In a recent development, Superdry announced the resignation of its finance chief, Shaun Willis, who is set to leave in March, on Friday. Giles David, who has experience at McColls, Casual Dining Group, and Wiggle, will take over the role temporarily.

This news of possible restructuring follows shortly after reports that Superdry had engaged PwC to assess options for debt financing to strengthen its financial position. Superdry, founded by Julian Dunkerton, has faced several challenging years marked by efforts to generate cash through capital-raising and licensing agreements for its brand.

The company's stock value hit a record low last year after it attributed weak sales to unusually mild autumn weather. The recent sales report caused a further decline in its share price, closing at 16.44p, reducing the company's market value to just £16 million.

There has been speculation about Julian Dunkerton's intentions for Superdry, considering he holds about a quarter of the company's shares. 

Superdry share price. 

The Superdry share price rallied 5.95% to trade at 17.8p from Friday’s closing price of 16.8p.