Superdry exits China store venture but still sees a “huge opportunity”

Superdry has reached an “amicable agreement” with its current partner in China, Trendy International, to exit their joint venture, Trendy and Superdry Holding Limited, after a strategic review.

The joint venture was formed in 2016 and has 25 owned and 41 franchise stores in China. The owned retail stores are due to close by the end of August, 2020, while the franchise partners in China will end their relationships by the end of the year.

The decision leaves Superdry free to determine how it will trade in China in the future, and is part of Superdry's transformation plan for the Group, putting in place the right infrastructure and business models in each of its core markets, which has been accelerated by the impact of COVID-19. 

Superdry CEO, Julian Dunkerton, said: “I believe that China represents a huge opportunity for Superdry in the longer term. As the way people are shopping there changes, it makes sense for us to shift our focus to the growth channels of online and wholesale. 

“Combined with the improvements we are making to our product ranges, I am confident that this is the right time for us to take back full control of our brand in China and to re-position our operations in the region to deliver profitable future growth for Superdry.”

Superdry anticipates that approximately £6m in total, of which £3m was recognised at HY20, will be written off in its FY20 accounts as a result of exiting the joint venture for China.

However, it is not currently expected that Superdry will incur further costs of closure or need to inject additional material cash to support the wind-up of operations.

Superdry said that it recognised that it had many loyal customers in China and, as it resets its brand, it will assess the right operating model for China to maintain a presence in what remains "a large and attractive market".