Superdry shares rocket as feared hedge fund backs £70m lifeline

Shares in Superdry skyrocketed after the fashion chain secured a lifeline from a lender backed by fearsome hedge fund Elliott Advisors.

The retailer, which was struggling to refinance a £70m loan due to mature in January, has agreed a new debt facility with Bantry Bay Capital.

Shares rose 16.6 percent, or 16.8 pence, to 118 pence. While investors were relieved that it would last another day, the new loan comes at a price.

Superdry will have to pay interest at the ‘SONIA’ benchmark rate plus 7.5 per cent, which is currently almost 11 per cent in total.

Andrew Wade, an analyst at Jefferies, said earnings estimates are “likely to fall next year due to higher interest expenses.”

He added: “It should be taken as a positive that the financing problems have been resolved.”

The rules attached to the new loan, which spell out the performance and other conditions Superdry must meet, also looked relatively lenient, he said.

It came as Superdry’s sales rose 3.6 percent in the 26 weeks to October 29 compared to the same time last year.

Boss and founder Julian Dunkerton said: ‘It is well documented that conditions are extremely challenging and were not helped by the unseasonably warm weather in October and November.

“However, by combining a great product with affordable prices, we managed to grow sales in the first half.”

He added: “We are under no illusions that consumer confidence is fragile and the picture is unlikely to change anytime soon.

“We are very pleased to have completed our refinancing and this, combined with the continued strengthening of our brand and product, means the business is in good shape as we trade through our important Christmas period.