Shares in Superdry dropped by nearly 50% earlier today after the founder of the firm, Julian Dunkerton, stated that he was no longer looking to take over the company.

Dunkerton, who holds a 26% stake in the company, had been in talks with a US private equity firm about a potential rescue deal for the fashion retailer, which initially helped to increase the share price.

However, shares in the firm plummeted by 47% following the announcement that Dunkerton was no longer interested in the investment.

The Superdry board has said it is still in discussions with the British businessman in regards to alternative structures, which includes a possible equity raise fully underwritten by Dunkerton.

The firm said that it had concluded that a takeover offer from Julian Dunkerton for Superdry is unlikely to deliver an outcome for shareholders, or stakeholders more broadly, that the transaction committee and Julian Dunkerton are confident can be executed in the context of the company’s ongoing work on its turnaround plan and material cost saving options.

Superdry, which has 98 stores in the UK, has struggled financially in the past few months, with revenue dropping by almost a quarter in the first half of the financial year, resulting in the fashion retailer losing its fourth chief financial officer in five years.

Investment director at AJ Bell, Russ Mould, stated: "Investors finally had a chance to price in a barrage of bad news from Superdry which was released after the market close last Thursday. The share price slumped by 47% which implies disaster.

"Julian Dunkerton has withdrawn his attempt to take the troubled retailer private which means Superdry now faces the prospect of having to conduct a heavily discounted fundraising to stay alive, conditional on delisting the group from the stock market.

"It has secured additional borrowing facilities that come with a chunky interest rate but that’s only going to be a small plaster on a big wound – not enough to save the day.

"Investors now appear to be dumping the stock to get back anything they can, even if it means crystalising a loss. In the absence of someone else throwing their hat in the ring and trying to buy the business, we can probably wave goodbye to Superdry as a listed entity."

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