Superdry shares rocket as feared hedge fund backs £70m lifeline 

Superdry shares rocket as feared hedge fund Elliott Advisors backs a £70m lifeline for the struggling fashion firm

Shares in Superdry shot up after the fashion chain secured a lifeline from a lender backed by fearsome hedge fund Elliott Advisors.

The retailer, which was battling to refinance a £70million loan due to expire in January, has agreed a new debt facility with Bantry Bay Capital.

Shares rose 16.6 per cent, or 16.8p, to 118p. While investors were relieved it would live to fight another day, the new loan has come at a price.

Lifeline: Superdry, led by Julian Dunkerton (pictured with wife Jade Holland-Cooper, said it has agreed a new debt facility with Bantry Bay Capital

Superdry will have to pay interest at the ‘SONIA’ benchmark rate plus 7.5 per cent, which currently totals a rate of almost 11 per cent.

Andrew Wade, an analyst at Jefferies, said estimates for profits next year ‘are likely to edge down to reflect the higher interest charge’.

He added: ‘It has to be taken as a positive that the funding concerns have been removed.’

The rules attached to the new loan outlining the performance and other conditions that Superdry has to meet, also looked relatively lenient, he said.

It came as Superdry’s revenue in the 26 weeks to October 29 rose 3.6 per cent compared to the same time last year. 

Boss and founder Julian Dunkerton said: ‘It’s been well-documented that conditions are extremely challenging and weren’t helped by the unseasonably warm weather in October and into November. 

‘However, by combining great product with affordable prices, we managed to grow sales in the first half.’

He added: ‘We are under no illusions that consumer confidence is fragile and that the picture is unlikely to change quickly.

‘We are very pleased to have completed our refinancing and this, combined with the continued strengthening of our brand and product, means the business is in good shape as we trade through our important Christmas period.