Dunkerton hits back at Superdry board as war of words escalates
By James Young | 14th March 2019
Julian Dunkerton has hit back at the board of Superdry in a war of words and battle for control that is becoming increasingly bitter.
The founder of the clothing company has issued his own letter to shareholders ahead of a general meeting on April 2 that blasts back at the company's board of directors.
Earlier this week, the current Superdry board urged shareholders to block Dunkerton's return to the top table, saying that it would be "damaging" to the company.
But Dunkerton, who famously turned Superdry from a Cheltenham market stall into a multi-mullion pound business, has now issued an incendiary letter of his own.
He has also opened a website www.savesuperdry.com as he campaigns to earn enough shareholder votes to earn himself a seat back on the board of the company.
Dunkerton quit the board in 2018 to concentrate on other business interests such as the Lucky Onion chain of bars and restaurants, and charity work.
But he still holds around 18 per cent of the company's shares himself and together with founding partner James Holder, the pair hold 28.5 per cent of the company's equity.
In the explosive letter released today, Dunkerton asks shareholders for support to appoint himself and Peter Williams, as an independent candidate, to the board of Superdry PLC.
Dunkerton said: "Superdry's share price has had a catastrophic decline over the past 12 months, driven by the company's dismal financial performance, reflecting a failed strategy.
"The company is in such a weakened state that it has floundered on one season's collection, but the real issues facing the business are far more fundamental, strategically and operationally.
James Holder and I co-founded Superdry. It has been a huge part of our lives, and we are enormously proud of its successes over the years.
"Collectively, we own 28.5% of Superdry's equity, so the financial implications of the current decline are extremely important to us, as they are to all shareholders."
Dunkerton then outlines a "mistaken strategy" and a "dismal financial performance" and explains his departure came from a "fundamental disagreement with the strategy adopted in 2017.
He goes on to accuse the current board of wiping more than £1billion of shareholder value from the company.
"I was increasingly marginalised, and largely cut out of the creative and design process from July 2017, some nine months before my departure," he said.
"Since January 2018, the strategy pursued by the current management team has destroyed c.£1.2bn of shareholder value.
The 977 word letter also explains how Dunkerton and Williams will offer "deep fashion, retail and brand experience", while calling upon Holder's creative abilities.
It also claims of 'low employee morale' and a loss of creative talent after the departure of a number key executives and members of the design team.
Dunkerton also makes an attack on current CEO Euan Sutherland, divulging his 2018 pay packet while saying that the company will be laying off staff to make cost-savings.
He added: "The CEO received FY 2018 pay of £3.2 million. Meanwhile, he recently announced a raft of significant job cuts in a drive to save £20m of costs.
"The General Meeting has been requisitioned in the hope and with the firm intention that we can work constructively with the current Board to restore the company back to growth and rebuild profitability.
"Our interests as major shareholders are fully aligned with yours, while the Board and the management team as a group own less than 0.25%.
"I would like to see sustainable growth and value-creation which would benefit all stakeholders with a long-term interest in this business.
"To this end, if Peter and I are elected to the Board, I will commit to not selling my shares for at least two years. My vision of how this can be achieved is in more detail at www.savesuperdry.com.
"Let's turn this business back around and restore the Superdry brand to its former glory! Thank you for your support. Sincerely, Julian Dunkerton."
It took less than four hours for the board to issue a curt and concise response to Dunkerton's letter and in a way it was just as acrimonious.
Whereas Dunkerton wrote nearly 1,000 words, chairman Peter Bamford's response amounted to just 71.
Bamford said: "the Board has reviewed the Statement and believes that it largely consists of points that the Board has heard in previous engagements with Mr Dunkerton and Mr Holder and has already addressed in the Company's shareholder circular issued on 11 March 2019.
"There is little new information and no clear articulation of the proposed strategy or action plan in the Statement"
The board also release a short update to shareholders with an emphatic 13 word missive, issued entirely in block capitals with four words underlined for extra emphasis.
The message : "YOUR BOARD RECOMMENDS YOU VOTE AGAINST BOTH RESOLUTIONS AT THE FORTHCOMING GENERAL MEETING.
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