In recent news, it has been revealed that activist investor Gatemore has acquired a 3.4% stake in Superdry, a move that has drawn attention to the potential recovery of the once high-flying company. Gatemore, known for its involvement in other companies such as French Connection and Moss Bros, typically expects positive action from the companies it invests in. However, in the case of Superdry, Gatemore has voiced its full support for co-founder Julian Dunkerton’s vision, indicating a positive relationship with companies undergoing turnarounds.

Julian Dunkerton returned to Superdry last year following a series of disappointing results that led to a significant decline in the company’s value. Since his return, Dunkerton has been dedicated to revitalizing the brand and restoring its desirability. Unfortunately, the impact of the coronavirus crisis and subsequent lockdowns has slowed down the pace of its recovery.

Despite these challenges, Gatemore remains optimistic about the future of Superdry. Liad Meidar, the managing partner at Gatemore, has expressed positive expectations and a willingness to further discuss their views with the board, management, and other shareholders. Typically, activist investors purchase stakes with the aim of creating conditions that will quickly boost the share price. In this case, Superdry shares are considered inexpensive compared to historical standards, having fallen by almost three-quarters in the past year. Currently trading at around 115p each, they were priced at £14 five years ago.

Sources linked to Gatemore even suggest the potential for a 500% recovery in Superdry’s share price over the next two years. Additionally, Gatemore supports Superdry’s focus on China through a franchise deal and its commitment to ethical sourcing. This focus on key growth areas gives Superdry an advantage, especially as other fashion companies face repercussions from the recent Leicester garment factory scandal.

As the partnership between Gatemore and Superdry unfolds, it will be fascinating to observe how their collaboration with the company’s founder and their emphasis on key growth areas can positively impact the brand’s journey to recovery. With Gatemore’s support, Superdry may have a better chance of regaining its former status and reestablishing itself as a leader in the fashion industry.

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