Shares in Superdry have sunk to an all time low after founder Julian Dunkerton said he no longer plans on making an offer for the business.
Investors have reacted badly to the news which broke late last week, before the extended Easter weekend, by the troubled fashion brand.
The British businessman, who has a 26 per cent stake in the company, had been in talks with a US private equity firm about a potential rescue deal, which had helped initially drive up its share price.
However, shares in Superdry tanked by over 50 per cent on Tuesday morning when it emerged the deal would fall through – a sign that investors were not impressed with Dunkerton’s abandoned plans.
Today, the board said discussions with Dunkerton remain ongoing regarding alternative structures, including a possible equity raise fully underwritten by the boss.
“A further announcement will be made as appropriate. There can be no certainty that a transaction with Julian Dunkerton will be agreed,” it said.
Russ Mould, investment director at AJ Bell, said: “Investors finally had a chance to price in a barrage of bad news from Superdry, which was released after the market closed last Thursday.”
“Julian Dunkerton has withdrawn his attempt to take the troubled retailer private which means Superdry now faces the prospect of having to conduct a heavily discounted fundraising to stay alive, conditional on delisting the group from the stock market.
He added: “It has secured additional borrowing facilities that come with a chunky interest rate, but that’s only going to be a small plaster on a big wound – not enough to save the day.
“Investors now appear to be dumping the stock to get back anything they can, even if it means crystalising a loss. In the absence of someone else throwing their hat in the ring and trying to buy the business, we can probably wave goodbye to Superdry as a listed entity.”
Superdry, which has 98 stores across the UK, has been struggling to keep its head above water for months, launching a number of schemes to shore up extra costs.
Back in October, it signed a joint venture with Reliance Brands Holding UK Ltd (RBUK) for the sale of its intellectual property in South Asia, in its latest bid to boost funds.
It mirrored an agreement announced by Superdry in March to sell the intellectual property of its Asia Pacific offering to South Korean retail group Cowell Fashion Company for $50m (£40m).