Superdry’s “phenomenal” deal de-risks its balance sheet, protects profit and loss and is a very positive step in the right direction, according to Liberum.
The fashion brand announced earlier today that it sold several intellectual property assets in Asia to South Korea's Cowell Fashion for £34mln.
The deal delivers “significant” shareholder value for a region that delivered low single-digit profit before tax last year, the broker said.
The sale also highlights Superdry’s low market cap while strengthening its balance sheet and restoring the belief that Superday has a “global appeal.”
Superdry exited the Chinese market in 2020 with no plan to reappear.
Despite a presence in Asia Pacific (APAC) regions, further investment would be required to build to previous scales and volumes, said the broker.
Re-building its presence in APAC is more likely to be successful through its deal with Cowell, which focuses on licensing and manufacturing products across the region, the company believes.
Additionally, the deal helps strengthen the balance sheet and fund ongoing working capital requirements, although Superdry said it is considering additional steps, including fundraising, to further improve the health of its balance sheet.
Superdry remains a buy with Liberum, with a target price set of 500p.