Major fashion brand with 96 stores 'could close branches' due to the problems
A MAJOR fashion brand could close branches amid the high street battle.
Superdry is said to be considering a “radical” restructuring, including job cuts, after reports of poor Christmas sales.
The designer chain is investigating the options for restructuring and has approached financial advisor PricewaterhouseCoopers (PwC), said Sky News.
She is said to be considering entering into a company voluntary arrangement (CVA), a form of insolvency.
A CVA is a way for a company to restructure but still continue to trade, but usually also involves closing stores and reducing rental costs.
Part of the restructuring could include a “substantial” number of store closures and job losses.
Superdry has 96 stores in Britain and 3,350 employees across the company, according to its website.
The Sun has contacted Superdry for comment.
It comes after the company announced plans to close eight of its stores in July last year.
In August, Superdry secured up to £25 million in funding from Hilco Capital.
The company said the additional funding would help accelerate its £35 million cost savings programme, which was announced in April.
This week bosses warned it could take some time for the company's fortunes to turn around as the market is unlikely to “ease” in the short term as the company said Christmas had been a challenge.
The clothing company said sales fell by almost a quarter (23.5%) to £219.8m in the six months to the end of October, with its adjusted loss almost doubling to £25.3m.
Chief executive Julian Dunkerton said: “Christmas trading proved challenging and we do not expect market conditions to ease in the short term.
“This has clearly been a difficult period for Superdry.
“A challenging consumer market, against a backdrop of macroeconomic uncertainty and some noticeably unusual weather events, have all resulted in the group's financial performance weakening.”
Bosses said they were focusing on plans to cut costs, with annual savings of £40 million planned by the end of this financial year.
But it is also reported that the company is trying to secure loans to pay its bills and has hired consultants as part of that process.
Directors can propose a CVA if their company is experiencing difficulties in paying its debts.
It means that the company essentially enters into a legally binding agreement with its creditors, which may include suppliers or landlords.
It can give a company some breathing room or allow it to reorganize or restructure its financing and/or operations with as little disruption as possible.
Last year Wilko considered entering into a CVA, after which the company closed all 400 stores after going into administration.
In 2019, card shop Clintons reported it was considering a CVA, after which it told landlords they urgently needed to close 66 stores.
Mothercare carried out its first CVA in 2018, resulting in a plan to close 55 stores, putting 900 jobs at risk.
Shoe store Office was also considering a CVA due to the unrest.
In 2020, coffee chain Caffe Nero launched a CVA to restructure its operations and avoid store closures and job losses.
Retailers have been feeling the pressure since the pandemic, as shoppers cut back on spending due to the rising cost of living.
High energy costs and the move to online shopping after the pandemic are also taking their toll, with many high street stores struggling to continue.
The high street has seen a slew of closures in the past year and more are in the pipeline.
Several major brands have also collapsed, such as Wilko and Paperchase.
Many e-tailers are struggling to make ends meet, especially during the Covid-19 pandemic.
Energy costs have risen and more consumers than ever are choosing to order online instead of going to the store.
This leaves some retailers struggling with budgets and having no choice but to close stores to cut costs.
British retailers saw the amount of goods sold fall last month, at the fastest pace in three years, as under-pressure households moved some of their Christmas shopping to earlier this year.
Sales volumes fell 3.2% in December, Office for National Statistics data showed, compared with a 1.4% increase a month earlier.
Several major chains are pulling down the shutters for the last time this month.
Lidl will pull down the shutters on its site in Thornaby next month.
The bargain retailer has confirmed that its Stockton-on-Tees locations will close on February 29.
Enter Jack Wills Worcester has announced it will close permanently on January 30.
Boots revealed it would close 300 stores over the next year as part of plans to develop its brand.
Not only shops were affected, but the large hamburger chain Byron Burger also fell under the administration and immediately closed nine restaurants.
Elsewhere, one of Britain's oldest greyhound racing tracks has closed its doors after nearly 100 years in operation.
In addition, a major fast food restaurant with 1,000 restaurants is closing one of its branches for good.
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