Shares in branded fashion retailer and wholesaler Superdry (SDRY) have shed almost 60% of their value since the start of January, dropping from £20.76 to a bombed-out 875p on disappointing trading and earnings downgrades.

This share price fall from grace has stirred Superdry co-founder Julian Dunkerton (pictured) to try to get his old job back running the business.

Dunkerton was chief executive until 2014 before switching to the role of brand director. He left the business completely in March this year in order to devote more time to other interests, yet he has clearly been unhappy about a change of strategy.

THE COMEBACK KID

Dunkerton is now mounting a campaign to build shareholder support for a return to Superdry, supported by co-founder James Holder (holding sway over 9.7% of the business). He tell Shares that he is getting very positive shareholder feedback.

The co-founder’s goal is to correct what he insists is a fundamentally flawed strategy by the current management team led by CEO Euan Sutherland.

Entrepreneur Dunkerton has been meeting with Superdry’s leading institutional investors in a bid to wrestle back control of the trendy jackets, hoodies and t-shirts designer, and has met with chairman Peter Bamford to express his concerns over the direction Superdry is taking.

Dunkerton is particularly critical of Superdry’s tactic of reducing product lines, when competitors are doing the opposite, and of the ‘penny pinching’ mindset of the management team, insisting Superdry’s eroded gross margin is ‘absolutely there to be recaptured’.

CLASPING THE FALLING KNIFE

‘My personal losses are considerable,’ he tells Shares. ‘I’ve still got a huge stake (18.45%) and I just can’t watch a falling knife destroy the 33 years of what I’ve built up.’

The self-styled proper old school retailer adds: ‘I’ve been pointing out the mistakes in the strategy for a long time. It is patently obvious it is not working, but it is totally rectifiable. We can sort this out very quickly.’

Dunkerton says Superdry is a successful global brand. ‘To start making the wrong decisions and missing the opportunities which are just enormous, it baffles me to be perfectly honest. I think the current management strategy has a negative outlook.’

He is highly critical of management’s current strategy to save money by having a single stock pool.

‘You can save some money by doing that,’ he explains. ‘And what they’re trying to do is have the same product in store, online and in wholesale. If that then stops you from expanding your product range, as is currently the thought process, what you’re going to stop doing is pushing the boundaries for the consumer.’

Dunkerton is also scathing on current management’s ability to get the retail basics right and is angered by the decision to sack Superdry’s entire visual merchandising team.

‘The only reason you would do that is if you think you can save a few quid, but the reality is your consumer experience is reduced. If you are just shoving product onto rails with no visual artistry to it, in the end, the brand is damaged, because people are buying into an experience. They don’t have to buy product from you, they want to buy product from you.’

FIXING THE PROBLEMS

Dunkerton says these issues will be resolved if he is successful in returning to the business.

‘This is a brilliant brand that just needs pointing in the right direction. There may be some changes necessary around me, but in essence it is obvious and clear to everyone I meet that the strategy I am proposing is logical and sensible.

‘We can turn it around, but we have to act now. I am meeting all the shareholders and getting very positive feedback. You can’t dispute the obvious strategic logic, so this is just about mechanics now.’

It seems clear that Dunkerton wants to keep the company as a listed entity rather than take it private, perhaps with the backing of a private equity consortium. ‘When investors realise what the growth opportunity and the scale is, the public arena is the place to deliver the price that makes sense. The rating will come based on that vision.’

We expect Dunkerton’s next move will be to request an emergency general meeting whereby shareholders will be asked to vote on the co-founder replacing Euan Sutherland as CEO. (JC)

THE OFFICIAL SUPERDRY RESPONSE

Superdry’s chairman Peter Bamford responded to Dunkerton’s campaign by saying: ‘The board of Superdry has huge respect for Julian Dunkerton as an entrepreneur and founder of the business.

‘Julian has raised a number of issues with the board regarding strategy since he left the business. We have reviewed and discussed these issues and, while we have some sympathy with some of his points, we have a different view on the best strategy or approach to addressing them.

‘Superdry is an ambitious, global, multi-channel brand and the board believes that Julian’s viewing of strategy has not evolved with the needs of the business.

‘We remain fully committed to our successful Global Digital Brand strategy and the board is confident that Superdry has in place the right leadership to ensure the continued development of our highly relevant brand.’

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