As boardroom coups go, this was a particularly bloody one with many a scalp being taken.
Julian Dunkerton’s return to the business he founded, alongside running mate and former Boohoo chairman and Selfridges chief executive Peter Williams, resulted in the rest of the board carrying out their threat to resign and exiting the building.
One notable exception is finance director Ed Barker, who has agreed to stay on as an adviser to help with the group’s full year results, but one man does not a board make.
“It has been high drama over the last few days but it is now a question of sitting everyone down and getting on with the normal day-to-day business”
Peter Williams, Superdry
Dunkerton is currently interim chief executive with Williams chairman. You can bet their phones will be ringing off the hook as headhunters flock to the scene of the crime, but in the meantime Dunkerton’s first task will be to secure buy-in from head office and store staff.
He gathered staff on Wednesday, his first day in the office, to tell them of his dedication to the business.
“It’s like coming home,” he says. “I got an amazing welcome from all the staff. Now, I am busy making sure we are all pointed in a positive direction and getting people excited by what we’re doing.
“The most important thing for me was getting the team positive. I’m loving it. What this company has lacked is somebody who understands every part of it, and that’s what I can do.”
“It has been high drama over the last few days but it is now a question of sitting everyone down and getting on with the normal day-to-day business,” agrees Williams.
The right stuff?
Headhunter Moira Benigson believes Dunkerton is the right man to revive Superdry.
“A business like that needs a creative at the top,” she says. “A person who understands the product and its nuances and who knows when to move on from a look and when to go deeper into it.
“I am a huge fan of Euan [Sutherland, former chief executive] so this is not a reflection on him. But that business could not be run by a general operator. It had not moved on and it became a pile it high, sell it cheap operation.”
Independent analyst Richard Hyman is less optimistic, however.
“History suggests that going back more often than not doesn’t work,” he says.
“There will be a search starting pretty immediately, I have a couple of people in mind. And I have been inundated with requests for jobs”
Julian Dunkerton, Superdry
Of course, you have the Steve Jobs and Malcolm Walkers rescuing Apple and Iceland respectively, but you also have Peter Williams of Jack Wills failing to revive the business or, at the more extreme end of the scale, Dov Charney being ousted from American Apparel.
Meanwhile, Hyman is sceptical that Dunkerton, who stepped down as brand and product director of Superdry last March, had no role in Superdry’s current trading woes. He believes that Dunkerton is perhaps more culpable than is being acknowledged and that his ability to turn the business around is therefore impeded.
“We’re asked to believe he was present but not involved around product. But that was meant to be his job and he doesn’t appear to be the type of chap who is easily sidelined.”
There has been speculation that in a few months’ time the ‘interim’ may be removed from Dunkerton’s title, but he insists this will not come to pass.
“No, no, no,” he laughs. “There will be a search starting pretty immediately, I have a couple of people in mind. And I have been inundated with requests for jobs.”
It is clear that Dunkerton is admired by many at Superdry and has a lot of grassroots support if the comments posted on his SaveSuperdry.com website are representative.
But there will be others recruited by the departed management team who will be feeling uneasy. Dunkerton will need to reassure staff and make them feel secure during these times of change for the business.
Dunkerton is of course more invested in Superdry than the departed board, not just emotionally but literally – he owns 19% of the business – and this passion will no doubt fuel his desire to succeed.
“[His] sensational return to the helm of Superdry speaks to the intimate relationship between successful companies and their founders, both financially and psychologically,” says YSC head of consultancy Sam Gilpin.
“It also speaks to the differences between entrepreneurial founders, who typically feel a close personal connection to their customers, and professional managers, who often bring greater rigour and discipline but lack as sharp an instinct for value creation.”
A two-pronged approach will allow the business to pursue a fast-fashion-centric strategy online while maintaining margin on staple products in-store
Dunkerton’s turnaround strategy centres on a return to a design-led ethos, recalibrating seasons and product range, and stopping discounting.
He plans to take a different approach to selling product online to in-store. Online, he will expand the number of products it stocks and will introduce regular product ‘drops’ to ensure newness. But, in-store it will stick to a two-season model.
This two-pronged approach will allow the business to pursue a fast-fashion-centric strategy online while maintaining margin on staple products in-store.
“I am getting retail standards sorted immediately,” Dunkerton says. “We are working on getting the right amount of stock in each environment, the right product in right densities. It’s a science and an art mixed and it’s been overly scientific and it’s the lost art.
“I’m looking at online SKU count and working out how quickly we can rectify that. We’ve started implementing changes already, you will see retail changes particularly quickly.”
He plans to near-shore more production and improve product – he and co-founder James Holder apparently had designs and Turkish factories “ready to go” before shareholders even voted. But, of course, fashion cycles are long and it will take months, if not years, to see the fruits of their labour.
He also plans to scrap the kidswear range proposed by the former management team because of the risk of making the brand less desirable in the eyes of its target customer.
Much of this is eminently achievable, although getting off discounting may prove difficult. According to Dunkerton, the business was on Sale for around 48 weeks in its most recent year and re-educating consumers on this will be hard.
Former management were clearly not sacrificing margin by choice – it was likely done to shift slow-moving product. What’s more, getting off discounting will be especially difficult given the current trading environment.
From Brixton to Berkhamsted
By far the most challenging aspect of the turnaround, however, is reviving the brand. Dunkerton has shown that he can build a cool brand. But turning it around is another matter entirely.
Superdry currently seems confused about whom it is for. This is an incredibly difficult position for a fashion retailer to be in and can be the first step towards a slide into irrelevance.
Superdry’s messaging currently focuses on a 16- to 24-year-old, with its advertising portraying a young, inner-city dweller who listens to grime music and might pair their Superdry products with Supreme.
“High prices were supported by it being very fashionable, very cool and having lots of cachet. But when you are in that position it leaves you vulnerable if you lose any of that”
Richard Hyman, analyst
Unfortunately for Dunkerton, the majority of people you see wearing Superdry are reading City AM on the 7.23 from Maidenhead, bound for another 9-to-5.
Just as many of its consumers are over 55 as are in its target age group, with 20% of its customer base falling into each camp, according to WGSN data. Put simply, its customer is more reflective of Berkhamsted than Brixton.
Hyman says: “Superdry is a brand that sells basics and sells them at very high prices. Those prices were supported by it being very fashionable, very cool and having lots of cachet. But when you are in that position it leaves you vulnerable if you lose any of that.”
Dunkerton does not want to say much on the repositioning of the brand but does concede “this is a brand and product story and we need to refocus on the brand and product, and that is exactly what I am doing”.
Dunkerton is clearly not lacking in passion or ambition. But reviving a brand in the toughest market in decades is quite the ask, even for its founder.