Julian Dunkerton is striding around Superdry’s barn-like showroom, yanking garments off rails, stroking fabrics and talking up the brand he believes he can bring back from the brink.
Aged 59, Dunkerton could be forgiven for retreating to focus on the rest of his empire, which extends from the family cider business to property and hospitality assets including the No 131 boutique hotel and bar in Cheltenham.
Instead, he sees at least another decade ahead at the brand he founded in the 1980s, having ploughed £10m of his own money into taking it off the stock market in July.
While he was comfortably able to fund the deal without wiping out cash reserves or remortgaging the Cotswold mansion he shares with fashion designer wife Jade Holland Cooper (thanks to their £100m-plus fortune), he faces a high-stakes journey to revive Superdry, which has been dismissed by many as an uncool “dad’ brand.
Dunkerton admits Superdry, which was born out of his first business selling T-shirts from his car and a market stall called Cult Clothing in Cheltenham, is his passion.
He now owns 75% of its equity, with former stock market investors controlling the rest, and specialist lenders Hilco and Bantry Bay looming in the background with large (and expensive) loans helping to fund a three-year revival plan.
The challenge of turning around the business, which employs 3,000 staff globally, is immense. At the height of its powers, in early 2018, the company was worth £1.7bn, but after years of slumping sales, its stock market value had dived to less than £3m on delisting.
Sales were almost £500m in the year to the end of April via 89 UK stores and 93 more directly operated stores overseas, as well as more than 300 franchise and licensed outlets, but that was down more than 15% on a year before. Pre-tax losses may have almost halved – but remained hefty at £65m.
The delisting comes after more than five years of disruption. Dunkerton left Superdry in 2018 and then returned in a boardroom coup when turnaround efforts by one-time chief executive Euan Sutherland led to a slump in sales and profits.
“The good news is that I’m coming back,” says Dunkerton, dressed head to toe in Superdry garb: a woollen jacket, skinny jeans and trainers. That comes after a “tough summer” for the whole fashion industry and two years of restructuring at Superdry, involving more than 100 job cuts at head office and dozens of store closures across Europe and the UK, helping reduce costs by £50m.
The latest figures show a double-digit rise in sales in recent weeks as cooler weather has prompted purchases of jackets and coats. Dunkerton says the brand is on track to break even next year and return to profit in 2026.
That comes after clearing a £19m backlog of stock he says was built up under the previous management so he can now react more quickly to trends with two “muses” in mind – dads and their teenage kids.
He says the brand had been “chasing too many rainbows” and now has a “very clear focus of who we are and what we are”.
“Preppy classics are absolutely back with my age group and the teenage age group.”.
Quitting the stock market has freed him up to spend time overseeing every aspect of the business, planning ranges, checking out factories and eyeing new licensing deals.
“It’s a huge benefit. I’ve just spent eight days going through every single one of these products,” Dunkerton says, rifling through clothes in the Cheltenham showroom.
While they are still very much present, there are fewer items with the big logos and the Japanese-influenced graphics that made Superdry big in the 1990s and 2000s. Instead, there is new, subtler SD branding for those more interested in quality clothing – at a premium high street price.
There are plans for more franchise stores overseas, and possibly more UK outlets as well as further brand licences after signing a kidswear deal with Next.
Dunkerton not only believes he has the right formula to turn the tide at Superdry, but has plenty of advice for the Labour government on how to revive the UK high street, too.
The Chinese fashion website Shein and other online behemoths such as Amazon should be paying far more tax in the UK, he says, while tourist shoppers should be tempted back from Paris with the revival of VAT tax breaks. He contends that Brexit was an “economic disaster” which led to millions of pounds worth of additional costs for Superdry – and other similar businesses.
“There is a huge amount of money just sat there waiting to be taken,” he says. The government needs to consider how the fast-growing online players such as Shein can pay “the right amount in a fair way or there will be British bankruptcies and the tax take will be lower”.
“Should it be the winter fuel allowance or a tax take [from companies such as Shein]?” he asks.
Shein, and some other online specialists, now exploit a loophole that excludes low-value items from import duty and VAT because they send individual items direct to shoppers from overseas.
As a result, Dunkerton says Shein, which is hoping to list on the London Stock Exchange, is “not working on a level playing field”.
According to Dunkerton, Shein should be paying import duty and VAT on the low-value goods it imports, as well as an environmental tax linked to the scale of home deliveries and its fast-fashion products.
“If you look at landfill it is not full of my products but products made in a particularly cheap way that last one or two wears. People have my products for 25 years and they are still going strong and you’ll be passing it on to your children.”
Shein did not comment but has previously said: “We keep prices affordable through our on-demand business model and flexible supply chain. This reduces inefficiency, takes out wastage of material, and lowers our unsold inventory.
“We pass this advantage to our customers, and this has driven our success around the world, not the exemptions that retailers receive under current tax regimes.”
Dunkerton claims Superdry is “second only to [ethical outdoor wear brand] Patagonia” in terms of sustainability efforts.
He says he has no plans to bring the label back to the stock market but hopes that one of his three children will eventually take charge. They will be hoping he can produce profits as sustainable as those environmental aims.
