Fashion chain Superdry has announced an amendment to its financing facility as it struggles to stay solvent.

The Cheltenham firm issued a warning earlier this month (April 14) saying that it needed to cut costs by more than 拢35m after seeing dampened consumer spending. Now Superdry is extending its loan facility, which is provided by Bantry Bay.

In December 2022, the lending provider issued a loan facility of 拢80m to Superdry, replacing the then existing 拢70m asset-based lending facility, which was due to expire at the end of January 2023. The details of the new extension have not yet been revealed.

In an online statement the company said: "Further to the company鈥檚 announcement on 14 April 2023, Superdry today announces the agreement of amendments to its financing facility, pursuant to which its lender, Bantry Bay, has agreed to increase the borrowing availability level under its asset-backed facility until completion of the previously announced sale of the APAC business.

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"The company currently has in place an asset-backed loan of up to 拢80m. The borrowing availability levels under the asset-backed facility is determined by the company鈥檚 asset base, which is currently reduced on account of a seasonal low in the company鈥檚 working capital cycle, alongside the previously reported weaker performance of the Wholesale division. As at close of business 24 April, the company鈥檚 net debt position is circa 拢26m."

The fashion brand said in its earlier announcement this month that it was considering a potential equity raise of up to 20%, which they said would be 鈥渇ully supported鈥 by Julian Dunkerton, the label鈥檚 founder and chief executive.

Mr Dunkerton started out selling clothes on a Cheltenham market stall, launched Superdry with the designer James Holder in 2003. Their first store opened in 2004 and the company grew rapidly before listing on the stock exchange six years later.

Fashion retailers have been suffering as consumers rein in spending on non-essentials as they struggle with big increases in energy bills and food prices.

Mr Dunkerton commented previously: "鈥淭he Superdry brand continues to evolve but there is no doubt that the market conditions we face are challenging, compounded by the issues we have previously disclosed and are working to address in wholesale. As a result, while we continue to deliver like-for-like growth in retail sales, we need to ensure our business is in the right shape to navigate these difficult times, which is why we are looking hard at our cost base."

Business Live has contacted Superdry for comment on today's announcement.

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