CHELTENHAM, United Kingdom — Shares in Superdry Plc fell more than 11 percent on Wednesday after founder Julian Dunkerton narrowly forced his way back into the company, which sparked the exit of most of its board members, including top executives.
Dunkerton, the former boss of Superdry, on Tuesday was voted back on the board by a slim margin and hours later was named interim chief executive after winning the backing of shareholders looking for a revival of the fashion group's fortunes.
The move did not sit well with most of Superdry's board, which had opposed his comeback. Chief executive Euan Sutherland, who has been at the helm for five years, resigned immediately.
Dunkerton, who owns 18.4 percent of the equity, quit a year ago after a row over strategy. He takes issue in particular with Superdry's product design and internet plans.
Analysts said the resignations raised fears of more departures as the company deals with a share price that has dropped 64 percent over the past year following several profit warnings, the latest in December.
"We would be more concerned if we see further significant departures from the retail board and operational management teams and view the recruitment of a heavyweight CFO as a priority," Peel Hunt analysts said.
Analysts also said short-term disruptions were inevitable as Dunkerton steadies the ship and starts to enact his recovery plans, which will tack on costs as the company tries to jump-start revenue.
Dunkerton and co-founder James Holder run a "Save Superdry" website, which highlights that Superdry lost about £865 million ($111.8 million) of its value after Dunkerton left the board.
Investec analysts downgraded their recommendation on the stock to "hold" from "buy," adding that the resignation of all but one board member left the group in a "management and strategic vacuum."
Superdry's board had accused Dunkerton of a lack of transparency with shareholders and said his return would see directors either resign or not seek re-election.
"The resignation of the entire board of Superdry and its two brokers following co-founder Julian Dunkerton's narrow victory vote yesterday to return as chief executive, monumental as it may be, is really only the tip of the iceberg where necessary change is concerned," Edison Investment analyst Kate Heseltine, said.
Analysts said Superdry will need to provide a clear view of the future to investors.
"From here the hard work begins to turn around the fortunes of this once-darling retailer that has seen its sales and profits, and the share price, plummet over the past year," Heseltine said.
Investec analysts said Superdry has relied heavily on the Christmas season and an over-reliance on hoodies, graphic tees and outerwear, and were skeptical of Dunkerton's strategy to fix these issues.
By Noor Zainab Hussain; editor: Bernard Orr.