Superdry has officially announced its plans to enter into a joint venture agreement with Reliance Brands Holding UK Ltd (RBUK), India’s biggest retailer. This deal involves the sale of Superdry’s intellectual property assets, including the brand itself and associated trademarks in India, Sri Lanka, and Bangladesh, to the joint venture vehicle. Under this agreement, RBUK will hold a 76% stake in the joint venture, while Superdry will hold a 24% stake.

Reliance Brands Limited (RBL), a subsidiary of Reliance Retail Ventures Limited, has been Superdry’s exclusive franchise partner in India since 2012. This new partnership solidifies their existing relationship and allows RBL to continue overseeing brand operations in the relevant territories. RBL currently manages over 18,000 stores in India for 50 different luxury fashion brands.

The total value of the deal is £40 million, with Superdry investing £9.6 million. Consequently, Superdry is expected to receive gross cash proceeds of £30.4 million (£28.3 million net of fees and taxes). The company believes that collaborating with Reliance will create the best opportunities for future growth in these territories, allowing Superdry to focus on increasing sales in its more well-established markets.

Since 2012, the Superdry brand has experienced rapid expansion in India and the company sees tremendous potential for further growth. With India’s economy flourishing, a growing population of affluent shoppers, and a rising demand for apparel, Superdry believes that the brand has a lucrative future in the Indian market. By partnering with RBUK, Superdry is capitalizing on RBUK’s expertise and position as the leading fashion retail operator in India to maximize this opportunity.

The agreements also include provisions for long-term collaboration between Superdry and Reliance, including terms for the use of new designs. Superdry will retain a perpetual, irrevocable, and sub-licensable license to continue manufacturing goods in the relevant territories.

Although the deal has been approved by the Superdry board, it still requires approval from shareholders and the company’s lenders. The completion of the deal is expected to take several months.

For the financial year ending April 2023, the intellectual property assets in South Asia generated approximately 1.8% of Superdry’s total group sales, contributing £11 million in revenue and £2.6 million in pre-tax profit.

The net proceeds from this deal will be used to strengthen Superdry’s balance sheet, increase liquidity, and fund ongoing working capital requirements as part of the company’s Turnaround Plan. This infusion of cash will support Superdry’s efforts to regain momentum in its more established markets.

Useful links:
1. Superdry Official Website
2. Reliance Brands Official Website