Fashion chain Superdry has announced an amendment to its financing facility as it struggles to stay solvent.
The Cheltenham firm issued a warning earlier this month (April 14) saying that it needed to cut costs by more than £35m after seeing dampened consumer spending. Now Superdry is extending its loan facility, which is provided by Bantry Bay.
In December 2022, the lending provider issued a loan facility of £80m to Superdry, replacing the then existing £70m asset-based lending facility, which was due to expire at the end of January 2023. The details of the new extension have not yet been revealed.
In an online statement the company said: "Further to the company’s announcement on 14 April 2023, Superdry today announces the agreement of amendments to its financing facility, pursuant to which its lender, Bantry Bay, has agreed to increase the borrowing availability level under its asset-backed facility until completion of the previously announced sale of the APAC business.
Read more: South West firms told to stay ‘vigilant’ as insolvencies hit three-year high
"The company currently has in place an asset-backed loan of up to £80m. The borrowing availability levels under the asset-backed facility is determined by the company’s asset base, which is currently reduced on account of a seasonal low in the company’s working capital cycle, alongside the previously reported weaker performance of the Wholesale division. As at close of business 24 April, the company’s net debt position is circa £26m."
The fashion brand said in its earlier announcement this month that it was considering a potential equity raise of up to 20%, which they said would be “fully supported” by Julian Dunkerton, the label’s founder and chief executive.
Mr Dunkerton started out selling clothes on a Cheltenham market stall, launched Superdry with the designer James Holder in 2003. Their first store opened in 2004 and the company grew rapidly before listing on the stock exchange six years later.
Fashion retailers have been suffering as consumers rein in spending on non-essentials as they struggle with big increases in energy bills and food prices.
Mr Dunkerton commented previously: "“The Superdry brand continues to evolve but there is no doubt that the market conditions we face are challenging, compounded by the issues we have previously disclosed and are working to address in wholesale. As a result, while we continue to deliver like-for-like growth in retail sales, we need to ensure our business is in the right shape to navigate these difficult times, which is why we are looking hard at our cost base."
Business Live has contacted Superdry for comment on today's announcement.
Read next:
Lush Cosmetics increases UK pay by over 10% as inflation soars
WH Smith says trading is 'ahead of expectations' as sales surge by 41%
Mulberry profits remain steady with investment in global brand awareness driving sales
ProCook kitchenware sales fall nearly 10% amid 'uncertain' market
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
