M&G, Superdry’s landlord, considers challenging rescue plan
Superdry’s flagship store in central London may face a potential legal challenge from M&G, the London-listed asset manager. M&G has engaged lawyers from Hogan Lovells to examine a restructuring plan proposed by Superdry earlier this month.
While M&G, which owns Superdry’s 32,000 square foot store on Oxford Street, has not confirmed a formal legal challenge, sources in the property industry have suggested it as a possibility. Other landlords, such as Landsec, are also closely monitoring the situation and awaiting detailed proposals to be disclosed next month.
The concern for property groups stems from their exclusion from a mechanism that would allow creditors to benefit from any future recovery in Superdry’s performance. The restructuring plan, set to be approved by the company’s creditors, will involve significant rent reductions for several Superdry outlets, but no immediate store closures.
In response to the potential challenge, a spokesperson for Superdry stated, “The Restructuring Plan is a process designed to secure the long-term future of our business. We hope our landlords will support us as we embark on putting in place our new target operating model.”
M&G declined to comment on the matter. Along with rent cuts, Superdry also plans to raise funds underwritten by its founder Julian Dunkerton and delist from the London Stock Exchange. This survival plan comes after failed takeover talks by Dunkerton.
Superdry’s financial struggles have been well-publicized, resulting in a steady decline of its stock value. As of Friday, the company’s shares were trading at approximately 7.4p, giving it a market capitalization of less than £8m. It has recently secured additional borrowing capacity from existing lender Hilco Capital and owes substantial amounts to Bantry Bay.
Founder Julian Dunkerton, who returned to the company in 2019 after being ousted, holds just under 30% of Superdry’s shares. The company has also been raising funds through the sale of its brand in various regions, including India and Asia-Pacific.
