What was it that Superdry’s board said about enjoying support from its major City investors? Here it is, from the 1 March announcement confirming that co-founder Julian Dunkerton would force a vote to try to get himself back in harness. “None of the other shareholders that the board has engaged with has indicated support for Mr Dunkerton’s return to the company,” said the incumbents. Too presumptuous. Too arrogant.
Maybe chief executive Euan Sutherland and chairman Peter Bamford were “engaging” with the wrong shareholders. Or perhaps they were talking to the right people but in the wrong way. Certainly the board’s approach came across as imperious. Insults were thrown at Dunkerton – his return would be “highly disruptive” – without pause to consider that a few investors might be up for some disruption after a 75% fall in the share price in little more than a year.
Julian Dunkerton is the first to admit that Superdry is his obsession. “I live, breathe and wear Superdry,” the 54-year-old entrepreneur said recently of the fashion brand he co-founded 16 years ago. “I have other businesses, but Superdry is my obsession.”
After three Es at A-level put paid to his ambition of becoming a doctor, Dunkerton focused on fashion. Living off the Margaret Thatcher government’s enterprise allowance scheme, which paid budding entrepreneurs £40 a week, the public school educated son of a BBC producer started out selling clothes at Cheltenham market. That stall would morph into the successful Cult Clothing chain but Dunkerton really struck business gold in the early noughties when he teamed up with designer James Holder to start Superdry.
Superdry grew quickly, aided by celebrity fans like David Beckham, and in 2010 Dunkerton, who still owns 18% of the company, banked £80m when it floated on the stock exchange. The businessman, who drinks nine shots of coffee a day, shuns smartphones which he argues “clog” up people’s time with email. If he has any spare hours he fishes on the River Avon, near the company’s Cheltenham head office.
Dunkerton’s other interests include his family’s organic cider business and a chain of gastropubs and hotels in his native Cheltenham. He recently got remarried to the fashion designer Jade Holland Cooper who runs her own label.
Dunnkerton quit Superdry last year after a row over strategy but an interview last year contained a clue that he would find it hard to walk away: “I don’t want to sit on a fancy yacht and twiddle my thumbs,” he said. “If you were a brilliant tennis player you wouldn’t stop playing, would you?”
The board’s better argument was that Dunkerton himself, before he quit a year ago as brand director, had been responsible for last year’s autumn/winter range that flopped. The founder never adequately answered that charge – his plea that he had been side-lined sound limp.
But his actual plan for what he would do differently was better. It wasn’t the angry wayward missile that Sutherland’s crew had led us to expect. Dunkerton would move some production from China to Turkey to shorten supply times. He would review the US rollout strategy. And he argued that Sutherland’s plan to get Superdry into kidswear would alienate the core audience of teenagers and twentysomethings who won’t wear the same gear as small children. These were sober ideas.
For all that, Dunkerton’s narrow victory, with a slender majority of 51.15%, is a stunning outcome. The founder and his designer, James Holder, have a combined holding of 28% but the board had the ultra-loyal Aberdeen Standard, with 15%, on its side. A clean sweep of other top 10 shareholders, which Sutherland and Bamford were clearly expecting at the outset, would have seen the board home.
Euan Sutherland, who quit as chief executive of Superdry hours after Dunkerton forced his way back into the company, is best known for the way he walked out of his previous job – running the Co-operative Group.
The 50-year-old angrily stormed out of the mutual – then mired in losses and scandal – in 2014, after details of his £3.6m pay deal were leaked to the Observer. He immediately took to the Co-op’s Facebook page to rage against the organisation and quit the next day, blasting the Manchester-based group for being “ungovernable” in his resignation letter. He later received a £1m payoff.
The imposing 6ft 6in Scot started out as a graduate trainee at Boots but soon switched to the consumer goods giants Mars and Coca-Cola. He had stints at high-street chains including Dixons, Matalan and Superdrug, working his way up to the top job at B&Q before joining the Co-op.
Maybe the rebels, notably Investec and Schroders, calculated that a founder, with his personal wealth on the line, would have more at stake than Sutherland, who was somehow deemed worthy of a £700,000 bonus last year amid the troubles. Or maybe they judged that a board that plays the man, not the ball, deserved a kick itself.
Backing Dunkerton is the high-risk choice, but, given that Superdry is worth just £440m these days, giving the founder a shot at revival isn’t unreasonable. If he messes up, he can still be booted out.
Cynicism and stupidity as bookmakers look beyond FOBTs
It’s hard to know which is worse – the cynicism or the stupidity.
As maximum stakes on fixed-odds betting terminals (FOBTs) were cut to £2 this week, bookmakers Paddy Power and Betfred launched paper-based games that, to any outside observer, could only be regarded as an attempt to drive a coach and horses through the new rules.
Roulette is the main game carried by the hideous FOBTs and Paddy Power’s Pick ‘n’ 36 product and Betfred’s Virtual Cycling are plainly roulette rip-offs. It’s just that a punter has to go to the counter for a slip to pick numbers.
A paper-based format may count as “inherently different” in the eyes of the bookies. Everybody else, surely, will see the same addictive game dressed in different clothes and played at slightly slower speed. That’s the cynical part.
The stupid bit is the bookies’ apparent belief that, even after the long and furious public debate over FOBTs, a paper-based high-stakes reinvention of the main product could be quietly slipped on to high streets. That was just fanciful. A day after the Guardian revealed the existence of the games, the Gambling Commission stepped in and forced Paddy Power and Betfred to pull the products.
In fact – and this is the achingly stupid element in the firms’ strategy – the commission was already on the case. Last weekend it issued a high-profile warning to firms not to try to bypass the new FOBT laws. And still Paddy Power and Betfred went ahead.
The commission says the duo may face regulatory action and it may investigate “key senior staff” at the bookies who brought the products to market. Quite right, too. Somebody senior at these firms will have devised and approved the grubby approach.
Indeed, the same individuals may be the ones who sign those splendid pledges about promoting only responsible gambling and behaving transparently. Naturally, everybody stands behind such fine intentions. Of course they do.
