The deal is worth £40 million but Superdry will invest £9.6 million in it and this should result in it receiving gross cash proceeds of £30.4 million, or around £28.3 million net of fees and taxes.

Following the transaction, RBL will continue to oversee brand operations in the relevant territories, “continuing to build upon their great working partnership with Superdry”.

RBL operates over 18,000 stores across India for 50 different luxury fashion brands with a presence in 7,000 towns and a total shopping area of more than 65 million sq ft.

The company said the brand has expanded fast in the country since 2012 and “considering the backdrop of a growing Indian economy, a growing population of affluent shoppers, and ever-increasing apparel consumption rates, the Superdry brand in the market has attractive potential”.

As to why Superdry wouldn’t want to take advantage of that potential as the sole owner of its brand, it said: “As the leading fashion retail operator in India, RBUK is best placed, through a majority IP ownership stake, to maximise the opportunity.”

All Superdry’s brand IP assets in the territories will move to a new JV entity and the agreements include provisions to support “long-term collaboration between the parties, including terms relating to the use of new designs. They include covenants that are customary in IP ‘co-existence’ arrangements, as well as customary provisions relating to maintenance and enforcement of IP rights”.

The deals also give Superdry a “perpetual, irrevocable, and sub-licensable licence to enable it to continue manufacturing (or engaging third parties to manufacture) goods in the territories. Reliance will continue to be supplied finished goods by Superdry, sold at standardised commercial terms”.

But while the deal has Superdry board approval, it sill has to be agreed on by shareholders and the firm’s lenders so completion is expected to take several months.

Superdry said it believes that the partnership with Reliance will provide “the best opportunities for the future growth of the brand in [the] territories, allowing the company to focus on growing its brand and increasing sales in its more established territories, where it has strongest expertise”.

So how big a chunk of the business is accounted for by this new agreement? It’s not huge… for now. For the financial year to the end of April 2023, the South Asian IP generated around 1.8% of total group sales and contributed revenue of £11 million, plus pre-tax profit of £2.6 million, including centralised costs allocation. 

And what will Superdry do with the cash injection? The net proceeds “will be used to increase the strength of the company’s balance sheet, boost liquidity, and fund its ongoing working capital requirements as part of the Turnaround Plan”.