Superdry in talks to sell US brand rights

Superdry is in talks to sell its brand rights in the US and Middle East in an effort to shore up the company’s shaky finances.

The retailer is in discussions with potential buyers about the sale of its brand and intellectual property rights in the markets. It is hoped the deals will raise tens of millions of pounds.

It comes as founder Julian Dunkerton continues his quest to bolster the company’s strained balance sheet. Superdry shares plunged last week after the retailer issued another profit warning that raised fresh doubts about its future.

The discussions come weeks after Superdry struck a similar tie-up in India and Sri Lanka with the retail empire of India’s richest person, Mukesh Ambani. A licensing joint venture with Ambani’s Reliance Brands raised £30m. That agreement mirrored one unveiled in March, when it offloaded intellectual property rights in South Korea, China and other parts of Asia for $50m (£40m).

Insiders suggest negotiations to offload assets in the Middle East are more advanced, while retail industry sources said attempts to sell its US brand are at risk of faltering after the interest of one suitor started to wane.

Superdry investors are reeling from its third profit warning this year. Shares crashed as much as 17.5pc to a record low last week after management blamed “abnormally mild” weather and the squeeze on family budgets for a 13pc fall in sales in the six months to the end of October. Trading was “significantly below management expectations”, the company said.

With Superdry’s share price trading at less than 34p, it is now 98pc below a peak of 2024p reached in 2018. The company is worth just £33m.

The retailer’s protracted troubles have raised questions about the wisdom of Mr Dunkerton’s decision to return from a spell away from the business to try and engineer a turnaround.

The fashion company had to raise £12m of emergency funds from shareholders in May. It has also been forced to turn to lenders of last resort to avert a liquidity crisis.

The new borrowings have come at a steep price. An £80m asset-backed lending facility with Bantry Bay carries an interest rate of around 11pc, while a £25m loan from Hilco is costing 10.5pc plus the Bank of England base rate. Mr Dunkerton has implemented a £35m cost-cutting drive at the business.

Trading in Superdry’s shares was suspended in August after the publication of its accounts was postponed. The following month, the chain reported a near-£150m annual loss in its delayed results.

Superdry’s latest setback prompted Shore Capital analyst Clive Black to describe the chain as “in the Champions League of profit warnings”.

He said: “This is a fragile business. It’s hard to be optimistic about its prospects.”

Mr Dunkerton has admitted Superdry’s performance was “significantly” below expectations.

Superdry declined to comment.