(Bloomberg) -- Superdry Plc plans to quit the London Stock Exchange as the troubled fashion retailer pushes through a radical restructuring to stay afloat.

The British clothing chain, which soared to popularity in the 2000s for its bold lettered tops, said delisting from the stock market, raising more funds and implementing a program to cut some UK store rents and payments owed to local authorities will help it revive the core business.

Shares of Superdry fell as much as 35% in early trading in London before paring back slightly. The stock is down about 94% in the past year. 

The retailer is looking to generate up to £10 million ($12.4 million) through an equity raise as part of its rescue plan and will cut rents at 39 of its shops in the UK, according to a statement Tuesday. 

Lenders Hilco Capital Ltd. and Bantry Bay Capital have agreed to the restructuring plan, which will put the business “on the right footing to secure its long-term future following a period of unprecedented challenges,” founder and chief executive officer Julian Dunkerton said.

Superdry warned that if its proposal, which does not affect suppliers or landlords outside the UK, does not go ahead it will have no choice but to consider insolvency proceedings. 

The retailer has suffered widening losses on declining sales, leaving the company with a market value of less than £8 million. Superdry employs more than 3,000 staff worldwide, who oversee 200 physical stores and 350 franchisees as well as licensees. No UK stores are scheduled to close although if landlords do not accept rent cuts closures are a possibility. 

Faltering Turnaround

Dunkerton, who co-founded Superdry in 2003 and holds a 26% stake, tried to take over the ailing brand. He had been in talks with potential finance providers about buying the remaining shares, but eventually abandoned his plan, according to a notice earlier this month. 

The company said Tuesday it’s exploring two possible options for raising equity: Dunkerton will either underwrite an open offer to raise up to €8 million ($8.5 million), or he will be the only participant in a £10 million placing.

Dunkerton returned to the helm in 2019 following a boardroom battle and vowed to turn around a slump in sales and profit but has failed to do so, hurt in part by changing consumer trends and the pandemic. 

“Once something of a market darling as it rode a wave of consumer demand for its faux-Japanese stylings, Superdry has been firmly out of fashion with investors,” said Danni Hewson, head of financial analysis at AJ Bell. “Currently changing hands for little more than 5 pence, at its 2018 heights the shares traded around £20.” 

--With assistance from Joel Leon.

(Updates with more details, analyst comment and updated share price.)

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