This has to be the most fascinating battle that fashion retail has seen for years. Following the Superdry board making no bones about not wanting co-founders Julian Dunkerton and James Holder (who own 29 per cent of the business), back. Dunkerton and Holder have launched the website ‘Save Superdry” ahead of the shareholder meeting which has been called for April 2 – an event which promises more drama than Gunfight at the OK Corral.
In an open statement aimed at shareholders, Dunkerton and Holder set out their reasons for wanting back in.
“In less than a year, all Superdry shareholders have experienced a 70 per cent fall in the share price and seen over £1.2 billion of value destroyed. Urgent action is required to address this alarming decline. By bolstering the Board and returning the two co-founders to the business (James Holder would return as a consultant to the business, focused on design), Superdry would return to be a design-led business: they would reinvigorate the DNA of the brand and get the business back on track and achieving its great potential.”
But the Superdry board are having none of it. They say that “Mr Dunkerton’s return to the Company, in any capacity, would be extremely damaging to the Company and its prospects.”
The reasons they cite include Julian Dunkerton’s views not having evolved with the needs of an increasingly international multi-channel brand business and the return of a “narrow and concentrated range mix, high option count, and low rate of sale model with a disregard for consumer and data insight.”
On the Save Superdry website, Julian and James say they have been trying to constructively engage with the Board privately for several months, “during which time the co-founders’ proposals to help turn around the company’s poor performance and strategic failings were rebuffed”.
As a result of the dramatic drop in value of Superdry’s shares, this global fashion behemoth has been officially excluded from the FTSE250.
As well as being co-founder, Julian Dunkerton is the company’s largest shareholder, its former CEO and former Director of Brand and Product. Dunkerton wants to be reappointed as a Non-Executive Director, from which he stepped down in March 2018 because of his disagreement with the Company’s strategy.
But Superdry says that his return would “damage morale across the business and cause departures of key personnel, including from within the Board.” That would presumably include Euan Sutherland, the company’s first external CEO who was appointed into the post in 2014, moving from his previous role at the Co-operative Group. Speaking in 2016 in an interview with Business & Innovation Magazine editor Nicky Godding, Dunkerton said of Sutherland: “Bringing in Euan has allowed me to concentrate on growing better and better product while protecting our brand integrity.”
Two years later, Dunkerton stepped down. And perhaps the reasons for that were contained in the same interview, in which Dunkerton also admitted to being obsessional. Speaking of his and co-founder Holder’s recipe for success, he said: “James creates all the product, I make sure it’s balanced in an exciting retail environment, that the price points are right and we have enough breadth of colour, size etc. I’ve never met anyone else in this industry quite like James. We have synergy and the same value system. We are obsessed at being the best.”
Clearly Dunkerton is in no mood to compromise, but then nor is the retailer’s board.
In a letter to shareholders, Superdry Chairman, Peter Bamford, said: “The Board unanimously believes that Mr Dunkerton’s return to theCompany, in any capacity, would be extremely damaging to the Company and its prospects. Mr Peter Williams is nominated as an independent non-executive director where it is clear to the Board that Mr Williams is not independent and does not represent the interests of all shareholders equally.”
He goes on to say: “Your Board and the management team are wholeheartedly and unanimously committed to the continuing delivery of the Global Digital Brand strategy as well as the intensified transformation programme announced in December 2018, for the benefit of all shareholders.”
Business & Innovation Magazine editor’s comment: “There is little doubt that Julian Dunkerton and James Holder are creative geniuses, passionate about the global business they famously built from a market stall. But the genius and determination it took to build the brand is hard to channel and difficult to manage, and it looks like the board of Superdry have failed in that respect. However the story plays out, I hope that the current situation turns out to be a relatively short hiatus in the upward trajectory of this brilliant Cheltenham-born business.”