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(Alliance News) - Superdry PLC on Tuesday said that it intends to delist from the London Stock Exchange, and will conduct an equity raise to provide liquidity headroom, amid ongoing cash problems.
Shares in the Cheltenham, England-based clothing retailer fell 23% to 6.20 pence each in London on Tuesday morning.
As to its reasons for leaving the London Stock Exchange, Superdry said it would be able to make "significant annual cost savings from the delisting". It also wants to implement its turnaround plan "away from the heightened exposure of public markets."
The restructuring plan, which is designed to reduce losses and property-related liabilities, will see Superdry undergo a reconstruction of its property estate and retail cost base.
The plan is expected to see rent reductions at 39 UK sites, extend the maturity of loans with Bantry Bay Capital Ltd and Hilco Capital Ltd, and generate material cash savings from rent and business rate compromises over the last few years.
It is not expected to affect Superdry's suppliers, employees or site landlords outside the UK, and should conclude in June this year. However, the execution of the plan is conditional on receiving proceeds from a planned equity raise.
According to Superdry, the equity raise will be structured in one of two possible ways: either via an open offer at 1.00p per share to raise gross proceeds of EUR8.0 million; or via a placing at 5.00p per share to raise gross proceeds of GBP10.0 million.
"I am aware of the implications for all our stakeholders, and I have sought to protect their interests as much as possible in the proposals we are announcing today. My decision to underwrite this equity raise demonstrates my continued commitment to Superdry, its stakeholders, its suppliers and the people who work for it. My passion for this great British brand remains as strong today as it was when I founded the business," said Chief Executive Officer & Co-Founder Julian Dunkerton.
Dunkerton has underwritten the equity raise.
"The business has faced extraordinary external challenges and, while good progress has been made on our cost saving initiatives, more needs to be done to get the business on a stable financial footing for the future," said Chair Peter Sjolander said.
Superdry's new targeted operating model is hoping to reach a revenue of between GBP350 million to GBP400 million in the long-term, a gross margin slightly above current levels, though a specific targeted date is not provided.
Sjolander added: "We believe that the proposed restructuring plan, combined with the equity raise fully supported and underwritten by [Chief Executive Officer] Julian Dunkerton, is the best way to achieve this, together with a delisting which would further reduce costs and enable the business to progress the turnaround. While we recognise the compromises we are asking from some of our stakeholder groups, we would urge them to support the proposals which we believe are the best way of ensuring Superdry's recovery over the long-term."
By Emily Parsons, Alliance News reporter
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