Superdry PLC (LSE:SDRY) has sold a number of intellectual property assets in Asia to Cowell Fashion Company Ltd for US$50mln.
The cash deal will see Cowell, based in South Korea, own and use the Superdry brand in key Asia Pacific markets, starting with its home market (South Korea) and extending to others, including China.
Superdry expects to receive total proceeds of around £34mln from the agreement which will be used to strengthen its balance sheet, boost liquidity and fund its ongoing working capital requirements, including the implementation of a significant cost-reduction programme.
The branded clothing retailer also signalled it is considering additional steps to further strengthen its balance sheet in connection with its turnaround programme, "which could include a potential equity issue".
Cowell’s operations focus on licensing and manufacturing apparel products for established global brands across product areas, including underwear, sportswear and accessories.
Superdry plans to collaborate with Cowell to design and develop market-relevant products consistent with the “Superdry brand heritage”.
Superdry will provide certain support and know-how relating to Cowell during the first two years following completion of the sale, for which it will receive an additional management fee of US$1.0mln cash, split into two payments.
Superdry chief executive 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.”
Shares in Superdry rose 5.7% to 114.20p in early exchanges in London on Wednesday.