The news doesn’t seem to get any better surrounding Superdry and following a bleak trading report, a story has emerged saying that it’s in talks about selling its brand rights in both the US and the Middle East.
The company has sold brand rights in international markets before but doing so in the US would be a huge move.
There’s been no confirmation, but the Telegraph reported that the firm is in discussions with potential buyers about selling its brand and intellectual property rights in the two markets with the aim of raising tens of millions of pounds.
The company’s balance sheet has been under huge pressure in recent periods and founder-CEO Julian Dunkerton has taken major steps to shore up its finances.
Superdry’s share price has also been battered, although the Telegraph report is clearly seen as good news with the price rising as much as 5% when the London stock exchange reopened after Christmas on Wednesday morning (27 December).
With the price currently at just under 36p a share the entire company’s market capitalisation is less than £36 million. This is well below the market value in the billions it enjoyed around five years ago when its shares traded at more than £20 each.
It’s unclear whether deals for the regions that are now in focus will come soon, but the newspaper cited insiders saying the negotiations for the Middle East are quite advanced. However, any US agreement might be delayed after “the interest of one suitor started to wane”.
As mentioned, deals for the brand rights in America and the Middle East wouldn’t be the first moves of their kind for the firm. In fact, only recently, it linked up with India’s Mukesh Ambani on a licensing joint venture with Ambani’s Reliance Brands for India and Sri Lanka, raising £30 million. Earlier this year, it sold the IPR for South Korea, China and other parts of Asia too for around £40 million.
Julian Dunkerton returned in spring 2019 to take the helm of the company he’d co-founded. His comeback happened after disagreements over strategy and concerns over the firm’s declining performance. However, a turnaround hasn’t yet happened with the company having spent a long time working through old stock and facing the devastation of the pandemic, which severely dented its recovery prospects.
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