It wasn't much of a welcome back for Julian Dunkerton: as the co-founder of Superdry celebrated a dramatic return to the board of the company he created, shares in the sweatshirts and hoodies retailer tumbled by almost 9 per cent.
That must have come as a disappointment to Dunkerton, who was already nursing hefty losses on his remaining 18 per cent stake in the once-edgy fashion brand.
Shareholders who handed him his narrow victory on Tuesday will not have been best pleased either, having already seen the shares collapse by more than 60 per cent over the past year following a series of profits warnings.
It’s not uncommon for a company’s founder to be called out of retirement to retake the reins should the business later run into difficulties. But it is unusual for a founder to quit of his own accord and then demand to be reinstated against the board’s wishes.
As his former business baby slithered deeper into difficulty, Dunkerton decided a few months ago that he was the only person capable of restoring its fortunes, demanding he be reinstated to run the retailer.
Not surprisingly, the board, headed by chief executive Euan Sutherland, begged to differ, sparking an acrimonious war of words in which each side blamed the other for Superdry's dismal performance.
When Dunkerton quit last year he claimed he had been shut out of strategy discussions when he was still at the group, and that the management team had damaged the integrity of the brand, losing touch with the group’s core customer base.
For their part the board insisted his return would be “extremely damaging” to the business, and blamed him for overseeing poorly-received ranges launched before his departure.
Shareholders
Having been firmly rebuffed by the board, Dunkerton was confident – or desperate – enough to take his case directly to shareholders, armed with his 18 per cent stake, plus the 10 per cent held by co-founder James Holder and another 10 per cent from two key institutional investors.
With other City investors appearing to back the board ahead of Tuesday’s shareholder showdown, it was a highly risky move. But in one of the most audacious coups in recent corporate history, Dunkerton snatched victory by a whisker, securing the support of holders of 51.15 per cent of the shares.
Also approved, by the same small margin, was the Dunkerton-backed appointment of retail veteran Peter Williams, a former chief executive of Selfridges and ex-chairman of online fashion retailer Boohoo.
Williams has now been appointed chairman and Dunkerton interim chief executive. And that’s pretty much it in the Superdry boardroom for now – news of their appointments was accompanied by the departure of every member of the board apart from the company secretary, along with the resignation of the company’s brokers.
The wholesale exodus from the boardroom underlines the scale of the disarray at the group. It was clear that the chairman and the chief executive had to go – too many harsh words had been exchanged in the battle for control of the business.
Indeed, on the eve of the shareholder showdown Dunkerton is understood to have called in lawyers over alleged defamatory comments made by the board to shareholders as each side battled for support.
Outlined his strategy
But Dunkerton himself appeared to hope at least some of the directors would stay, although of course only those who shared his vision for Superdry’s future.
A great deal is now resting on Dunkerton’s vision for the business. He has already outlined his strategy, pledging to reverse the move into children’s wear, to return the label to its design-led roots, cut back on discounts and promotions and to shorten lead times to better capitalise on fashion trends.
But the high street is an unforgiving place these days, and the months of turmoil in the boardroom have clearly had a destabilising effect on the business. Superdry shares rose initially on news of Dunkerton’s victory but by the end of the day serious doubts had set in about the scale of the task facing him.
New appointments will obviously be made to the board but, given how the last set of directors was treated, and the state of the business, recruiting a permanent chief executive could prove difficult.
“The hard work starts now,” Dunkerton said on Tuesday, and he’s not kidding. As the share price reaction showed, victory may be short-lived. Now he has to deliver the turnaround he promised unhappy shareholders. They backed him this time, but their continued support will depend on how swiftly he can produce results.
Fiona Walsh is business editor of theguardian.com
