Superdry
£50.5m profit. A £67.7m loss one year earlier. Julian Dunkerton spent two years fighting to get Superdry back.
ALL BREAKDOWNSTHE BREAKDOWNFEATURE
7/28/20267 min read
The Superdry turnaround: from a £67.7 million loss in 2024.
To a £50.5 million profit.
So why did the shareholders who backed it lose almost everything?
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THE SETUP
Founder, Julian Dunkerton fought two years to get his old job back. Getting it didn't stop the losses. They ran for five more years. Then, within months of the company leaving the stock market entirely, it turned a profit for the first time in years. Same brand. Same debts. Same bloke in charge.
So what actually changed?
He co-founded Superdry in 2003 and floated it on the London Stock Exchange in 2010 at 500p a share. Shares hit 1800p within two years, taking the peak value past half a billion quid.
The logo did the selling. Big, loud, unmissable from across the street. That only worked while the look was hard to copy. It wasn't. High‑street look‑alikes plus full‑on counterfeiters started printing the same oversized logos onto their own hoodies, so a shopper could get most of the look for a third of the price.
Superdry lost the unique look and once it did, it couldn't charge full price, it had to discount to keep selling volume. Superdry tried to keep growing anyway, opening more stores and ordering more stock, then discounting hard to shift it.
Dunkerton left the board that same year. In public it was "other demands on his time." It was a row over direction. He wanted to keep the jackets-and-hoodies formula that built the brand.
The rest of the business wanted a faster fashion cycle and coats and jackets were the flagship of that new direction: the category meant to prove Superdry could sell on design instead of a logo, ordered five to six months ahead of the season, before anyone knew what the winter would bring.
Dunkerton lost the argument and walked.
Then the winter turned mild and the bet that was supposed to define the new Superdry became the biggest liability on its books. Unlike a hoodie, a coat that doesn't sell in October doesn't get another chance in March, it just sits there depreciating.
The stock had nowhere to go but the markdown rail and the discounting had to be deep enough to move a season's worth of coats in one go, right as the logo range, the one reliable earner Superdry had left, was also losing its pricing power.
Two engines failed in the same year. That's the moment of the decline and the five years of losses started.
Dunkerton won a shareholder vote to return in April 2019 with a tiny majority of 51.15% and watched the chairman and chief exec resign the same day.
He got the party, the flags and the returning-hero moment. Dunkerton looked all fur coat and no knickers, because Superdry lost £166.9 million in FY20, then £148.1 million in FY23. By FY24 the board was warning shareholders it would need to enter administration without a restructuring plan.
April 2019 looked like the turning point. Founder comes home, the suits get shown the door, the brand gets its soul back.
Five years of losses say otherwise. Something was jamming the fix that leadership alone couldn't reach.
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THE PLAYBOOK
1. The founder came back. Nothing changed for five years.
Superdry's own board didn't want him back. They told shareholders, in writing, that Dunkerton's return would be “extremely damaging to the company and its prospects.” Their case: his style didn't fit the collaborative culture they said they'd built and they pinned the mild-winter coat disaster on the range he'd shaped before he left.
Aberdeen Standard, then the second biggest shareholder, backed them. So did Pirc and ISS, the two advisory firms most big institutional money listens to.
None of it mattered. Dunkerton won the vote, by the skin of his teeth and the City took its cue from the result rather than the warning. Shares rose 5% on the news, then fell almost 9% by the close, which tells you what the market thought once it had a minute to think about it.
It wasn't a rescue. Within weeks Superdry issued its third profit warning in eight months. There was a brief flicker of hope in FY22, a £29.7 million profit, gone almost as soon as it arrived, before FY23 dragged the company back into the red.
By FY24 revenue had fallen to £488.6 million and the board was warning shareholders the company might not survive without a restructuring plan.
Same founder. Different year. Same result.
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Takeaway: if a business is struggling, look past who's in charge before you assume that's the problem. The person at the top is the easiest thing to change and, on its own, usually the least likely thing to fix it.
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2. The market wanted confidence.
Three profit warnings in eight months from a listed company still gets wrapped in reassurance: the brand's strong, the plan's working, trading's already turning. A listed company has to sound like everything's under control, because if it doesn't, the share price falls and the next round of funding gets harder to raise.
A restructuring runs on the exact opposite fuel. To force a deal onto creditors who'd rather vote against it, a UK Restructuring Plan has to prove something in court: that those creditors end up worse off without the deal than with it. Which means putting the failure on paper. Modelling the version where it doesn't work and showing a judge.
In front of shareholders, doubt drops the share price. In front of a judge, doubt is the evidence. Superdry had to be sunny for one audience and doom-laden for the other, using the exact same set of numbers, which is a trick even Paul Daniels would've struggled with (apologies to anyone under 35 who’s googled that).
Creditors voted on 10 June 2024. 99% in favour. Court approved it a week later. Superdry left the stock market on 15 July.
Inside that window: 47 UK stores closed, roughly half the estate. Rent cuts on 36 more. The Belgian distribution centre shut. Over one in ten UK jobs gone.
Savings: £128 million a year.
Dunkerton had five years as a listed company to find that kind of money, insisting the whole time it was all under control. He found it in ten weeks, the moment the company was finally allowed to admit that it wasn't working.
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Takeaway: being listed rewards a company for sounding certain. A turnaround runs on admitting what might fail. Getting both out of the same shareholders at the same time is nearly impossible.
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3. Shareholders paid for the fix
Superdry was worth over half a billion pounds at its peak. By the time it left the stock market, that was down to about £3 million. A 97% haircut, though “haircut” undersells it a bit, this was closer to the full Bobby Charlton.
Put £10,000 into shares at the top and you'd have had under £300 left by July 2024. Most people still holding by then were ordinary shareholders rather than big institutions who could shrug the loss off against something else. Plenty found out what their shares were now worth from a stock exchange filing rather than a phone call.
That wasn't collateral damage from the restructuring. It was more or less the point of it. Every pound the plan saved came straight out of what was left of the share price, so shareholders didn't lose almost everything because the turnaround failed. The turnaround worked because they lost almost everything.
A year on, the numbers show why. Revenue down 23% to £374.6 million. Gross margin up to 58.2%. A £67.7 million loss turned into a £50.5 million profit. None of it came from selling more clothes. It came from a smaller company, a lower cost base and no shareholders left to answer to.
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Takeaway: saving a business and protecting a share price sound like the same job. They're not. The moment one needs honesty and the other needs confidence, someone has to lose, and it's rarely the company.
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WHAT GETS MISSED
This whole saga gets told as a story about one man, either the founder who saved the brand or the founder who nearly sank it depending which pub you're in. Nobody talks about the bit that made the rescue possible, which had nothing to do with Dunkerton at all.
A UK Restructuring Plan can bind creditors who never agreed to anything. Landlords who voted no still got dragged along because enough of the room voted yes. That mechanism only became law a few years before Superdry needed it. Ten years earlier, any one landlord could've said “no thanks” and kept full rent on their store regardless of what everyone else wanted and the whole plan falls over.
The real story here is legal timing. Superdry happened to need saving at exactly the point in legal history when saving it became possible.
That should worry you more than it comforts you. Any business with enough stakeholders, investors, lenders, landlords, board members who all need to hear something reassuring at the same time is sitting on the same problem Superdry had.
Most of them won't have a Part 26A plan waiting to bail them out. They'll just have the argument, the five years of losses and nobody with the legal power to make everyone agree at once.
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THE PAPER TRAIL
Julian Dunkerton, Superdry co-founder, to exit company
3 minute read
How Superdry framed Dunkerton’s departure as a planned transition: he steps down from the board on 31 March 2018 to focus on “other business and charitable interests,” sells part of his stake for £17.8m and hands product and brand to creative teams. A sanitised exit that later reads very differently once both sides start blaming each other for the failed AW18 range and strategy.
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Superdry tells shareholders to reject co-founder’s board bid
3 minute read
Reports on Superdry’s formal circular ahead of the 2 April vote, where the board urges investors to block Dunkerton’s return as “extremely damaging” and insists his view of strategy “has not evolved with the needs of the business”.
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What went wrong at Superdry?
4 minute read
A post‑mortem on Superdry’s slump that plays the blame game between Dunkerton and the board, covering his quiet March 2018 exit, the “misguided strategy” he says he couldn’t put his name to, the flop AW18 collection the company says he oversaw and analyst commentary that the brand had gone from fresh to stale as rivals and cheap imitators undercut it.
https://www.bbc.co.uk/news/business-47524589bbc.co
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The troubled AW18 range
3 minute read
News piece that links the troubled AW18 range directly to the governance fight: Superdry blames “unusually warm weather” and underperforming AW18 outerwear for a profits warning and share price slump, while Dunkerton uses the crisis to attack the strategy behind the Autumn/Winter collection and step up his campaign to retake control of the brand.
https://www.theguardian.com/business/2018/dec/12/superdry-blames-warm-weather-shares-plummet
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