Superdry pulls out of China JV, expects £6m writeoff

Clothing retailer Superdry said on Thursday that it was pulling out of its joint venture in China and expects a £6m writeoff as a result.

The company said it had reached an amicable agreement with its current local partner, Trendy International, to exit their joint venture, leaving Superdry "free to determine how it will trade in China in the future".

The group said its decision was part of a broader transformation plan, putting in place the right infrastructure and business models in each of its core markets, and has been accelerated by the impact of the Covid-19 pandemic.

The joint venture was formed in 2016 and has 25 owned and 41 franchise stores in China. The owned retail stores are due to close by the end of August, while the franchise partners in China will end their relationships by the end of the year.

Superdry expects that about £6m in total, of which £3m was recognised at HY20, will be written off in its FY20 accounts as a result. No further costs are expected to be incurred.

Chief executive Julian Dunkerton said: "I believe that China represents a huge opportunity for Superdry in the longer term. As the way people are shopping there changes, it makes sense for us to shift our focus to the growth channels of online and wholesale.

"Combined with the improvements we are making to our product ranges, I am confident that this is the right time for us to take back full control of our brand in China and to re-position our operations in the region to deliver profitable future growth for Superdry."

At 1355 BST, the shares were down 4% at 150.94p.