Euan Sutherland seems to relish a challenge. He sprang into the public eye in May 2013 when he was recruited to stabilise the Co-operative Group, after mismanagement in its bank had lumbered it with a £1.5bn black hole. It was not a happy time.
He sold 70 per cent of the banking arm, but that still left the group weighed down with debt. His solution was to sell off the Co-op’s farms and possibly its pharmacy chain, but the 20-strong board dug in its heels. The Co-op group is owned by its members (the clue is in its name) and they elect the board. Many resented his £1.5mn salary plus £1.5mn retention payment at a time when 5,000 colleagues faced redundancy. The clash degenerated into a back-me-or-sack-me situation. The group, he said, was “ungovernable”. His successor was left to sort it out.
In October 2014, Sutherland replaced founder Julian Dunkerton as chief executive of SuperGroup. Dunkerton stayed on as a director, and a new premium range of clothing helped turn the group around. After three years of Sutherland’s leadership, the market cap had doubled to over £1.5bn, and the group’s name was changed to Superdry (SDRY), after its trend-setting brand of sweatshirts and coats. Dunkerton left in March 2018, at which time almost half of the group’s sales – and, because of their higher margins, about three-quarters of its annual profits – came from autumn and winter clothes. In late summer, there was an unprecedented heatwave, and people weren’t buying. That year, the group lost two-thirds of its market value.
Dunkerton went public. He accused Sutherland of failing to understand fashion, and that within Superdry he “thought he could change the model, but he couldn’t”. The showdown came at the AGM in April 2019. The board backed Sutherland. Dunkerton claimed that his “misguided consultant-led business model” had tarnished the brand, and that the constant discounting and licensing deals had lost its style-conscious custom. When Dunkerton was voted back onto the board by the narrowest of margins, eight of the nine directors resigned, including Euan Sutherland. Superdry’s market cap was then £450mn, but restoring that lost brand image has proved to be a tough call. The group is now valued at about £10mn, which ironically is about the same as the total that Sutherland received in cash and shares during his tenure.
Next came Saga (SAGA). Sutherland became the chief executive of the over-50s group in January 2020, not long after turning 50 himself. The travel business was about to launch two new cruise ships, but the insurance business, which generates most of its profits, had needed to cut premiums to remain competitive. The following month, Covid laid bare the group’s chronic balance sheet. Sutherland later attributed this to Saga’s private equity owners, who’d floated the group in 2014 “in a weakened position, loaded with debt, starved of investment and driven with a very short-term focus”.
Sir Roger de Haan, the son of the founder and former chief executive, came back to chair the group after making available up to £100mn as part of an emergency £150mn equity issue. A year later, a £250mn bond eased some of the debt servicing pressures. The focus now was to maintain investor confidence. A series of trading outlooks sounded optimistic, and travel demand increased post-Covid, but competitors seemed to bounce back more strongly. Insurance, which is cyclical, saw spiralling inflation push up the cost of claims. Those outlooks hinted at more than was delivered.
When Sutherland left Saga in January 2024, De Haan said that he’d “steered Saga through the Covid-19 pandemic”; overseen “detailed work to strengthen the brand and identify new income streams” and had stabilised the business and “returned it to profitable growth”. There must be a lag effect, for at its interim stage last September, Saga reported a small underlying profit, but strip out the adjustments and the group is still loss-making. Lazards is said to have been called in to advise about how best to reduce the £650mn debt pile. While he was at Saga, Sutherland received almost £8mn in cash and shares while, due to the pandemic and its aftermath, the group lost two-thirds of its market value.
Investors have to rely on directors to find the best fit when they recruit chief executives. Only time can tell how well they’ll anticipate and manage change when their abilities are tested by internal and external pressures. Some in the investor community blame Sutherland for the demise of Superdry and believe he should have done better at Saga. Others say that he made the best of a bad job under trying circumstances.
Sutherland has now moved on. His strengths include his “consumer insight, innovation and digital capability” and delivering “major transformation programmes”, according to the directors of AG Barr (BAG). He starts as their chief executive on 1 May.
