Fashion brand Superdry said on Wednesday that it has agreed to sell its intellectual property assets in certain countries within Asia Pacific to South Korea’s Cowell Fashion Company for an upfront fee of $50m in cash.
Superdry, which expects to receive around £34m net of transaction costs and tax, said the proceeds will be used to increase the strength of its balance sheet, boost liquidity, and fund ongoing working capital requirements, including the implementation of a significant cost-cutting programme.
The company also said it’s considering “additional steps to further strengthen its balance sheet in connection with its turnaround programme, which is being delivered in a challenging market, which could include a potential equity issue”.
Under the terms of the agreement with Cowell, the local operator, which has been listed on the South Korean stock exchange since April 2015, will own and use the Superdry brand in key APAC markets, starting with its home market and extending to others including China.
Superdry and Cowell will work together to develop products relevant for those markets.
In the first two years after completion of the sale, Superdry will provide certain support and know-how relating to the brand to Cowell. In consideration for these services, an additional management fee of $1m, comprising two payments of $500,000 each, is also payable, in cash, directly to Superdry.
Chief executive and founder Julian Dunkerton said: “This agreement offers the Superdry brand a fantastic opportunity to expand its global reach, whilst providing additional funding to help deliver our turnaround programme in the face of the challenging consumer landscape.
“I’m absolutely thrilled by the opportunity to work together with Cowell to create inspiring products consistent with our brand heritage and build out across the APAC market.”
