Superdry confirms China JV will be wound up
Superdry has confirmed an “amicable agreement” to end its Chinese joint venture with Trendy Group and will reassume full control of its brand there.
All 25 existing company-owned stores will close by the end of August, and 41 franchised stores by the end of the year.
News Superdry was closing its Chinese stores was first reported by Inside Retail Asia on Wednesday and the UK streetwear brand formally announced the move in a statement Thursday.
While the current partnership will end, Superdry CEO Julian Dunkerton said once the brand recovers control of its label in China, it will determine how it would trade there in the future.
“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,” he said.
“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 reposition our operations in the region to deliver profitable future growth for Superdry.”
The decision was framed as part of Superdry’s wider transformation plan in which it is moving to put in place “the right infrastructure and business models in each of its core markets”. Some of these changes have been accelerated due to the impact of the Covid-19 pandemic.
Superdry launched its brand in China in 2015 and the joint venture, Trendy & Superdry Holding was formed the following year. Each partner pledged to invest £9 million over 10 years to develop the business.
Exiting the deal will cost Superdry about £6 million in total, of which £3 million will be recognised in the 2020 half year figures.
The UK company said it did not expect to incur any further costs relating the closure of a need to inject additional funds to support the winding up of the business.
As yet, the company’s future plans for the market are unclear, but it would appear there will be a strong focus online.
“Superdry recognises that it has many loyal customers in China and as it resets its brand, Superdry will assess the right operating model for China to maintain a presence in what remains a large and attractive market,” read the statement.
- Image credit: Superdry.