A MAJOR fashion brand could close branches due to street fighting.
Superdry is reportedly considering a “radical” restructuring including job losses after reporting poor Christmas sales.
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Superdry is said to be considering a “radical” restructuringCredit: Getty
The designer chain is considering restructuring options and has approached financial advisers PricewaterhouseCoopers (PwC), according to Sky News.
It said it was considering entering into a company voluntary arrangement (CVA), a form of insolvency.
A CVA is a way for a company to restructure itself but continue to operate, but usually close some stores and negotiate a reduction in rental costs.
Part of the restructuring could include a “significant” number of store closures and job losses.
Superdry has 96 UK stores according to its website and employs 3,350 across the company.
The Sun has contacted Superdry for comment.
This comes after the company announced plans to close eight of its stores in July last year.
Then in August, Superdry secured up to £25m in funding from Hilco Capital.
The company said the extra funding would help accelerate its £35m cost-cutting programme, announced in April.
This week, bosses warned that the company’s fortunes could take some time to turn around, as the market was unlikely to “get any easier” any time soon, as the business said Christmas had been challenging.
The clothing company said its revenue fell by almost a quarter (23.5%) to £219.8m in the six months to the end of October, with the adjusted loss almost doubling to £25.3m
Chief executive Julian Dunkerton said: “Christmas trading has proved challenging and we do not expect market conditions to ease any time soon.
“This has obviously been a difficult period for Superdry.
“A challenging retail market, set against a backdrop of macroeconomic uncertainty and some highly unseasonal weather conditions, combined to weaken the group’s financial results.”
Bosses said they were focused on cost-cutting plans, with £40m of annual savings planned by the end of this financial year.
But it was also reported that the company is trying to get loans to pay its bills and has hired advisers as part of that process.
Directors can propose a CVA when their company is having difficulty paying its debts.
This means that the company is essentially entering into a legally binding agreement with its creditors, which may include suppliers or landlords.
It may give the company some breathing room or allow it to reorganize or restructure its financing and/or its operations with as little disruption as possible.
Wilko considered entering a CVA last year and then closed all 400 of its stores after falling into administration.
Back in 2019, card shop Clintons reported it was considering a CVA, then told landlords it had to close 66 stores urgently.
Mothercare carried out its first CVA in 2018, resulting in a plan to close 55 stores – putting 900 jobs at risk.
Shoe retailer Office was also considering entering a CVA amid difficulties.
The coffee chain Caffe Nero launched a CVA in 2020 to restructure its operations and avoid store closures and job losses.
Retailers are feeling the pinch from the pandemic, while shoppers are cutting back on spending due to the rising cost of living crisis.
High energy costs and the post-pandemic shift to online shopping are also taking their toll and many high street shops are struggling to stay in business.
High Street has seen a whole slew of closures over the past year, with more on the way.
Several big brands also failed, like Wilko and Paperchase.
Many retailers have struggled to survive, especially during the Covid-19 pandemic.
Energy costs have risen and more customers than ever are choosing to order online rather than going to stores.
This has left some retailers struggling with budgets and having no choice but to close stores to cut costs.
British retailers saw the volume of goods they sold last month fall at the steepest rate in three years as families under pressure moved some of their Christmas shopping at the start of the year.
Sales volume fell by 3.2% in December, data from the Office for National Statistics show, compared to growth of 1.4% a month earlier.
Several well-known chains are closing their shutters for the last time this month.
Lidl will pull down the shutters on its Thornaby site next month.
The bargain retailer has confirmed that the Stockton-on-Tees site will close on February 29.
Jack Wills in Worcester has announced it will close for good on January 30.
Boots has revealed it will close 300 stores over the next year as part of plans to grow its brand.
The shops aren’t the only ones affected, the big burger chain Byron Burger also fell into administration and closed nine restaurants immediately.
On the other hand, one of the UK’s oldest greyhound racetracks has closed its doors after nearly 100 years in business.
In addition, a large fast food restaurant with 1,000 restaurants is closing one of its branches for good.
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