Julian Dunkerton, the chief executive and founder of Superdry, has ended his two-month pursuit of the British retailer.

Dunkerton, who set up the company in 1985, approached the board in February over a possible offer for shares he did not already own.

But Superdry said Dunkerton, who has a 26 per cent stake, had walked away from takeover talks.

Both he and the board concluded that any offer made was unlikely to be enough to help the firm deliver its turnaround and cost-saving plans. Shares sank 5.1 per cent, or 1.55p, to 28.8p.

Superdry sounded the alarm over its finances in January when its first-half results showed a sharp drop in sales as customers cut back on online spending.

Earlier this month, Superdry said that it was in talks with the restructuring firm Hilco over increasing its lending facilities by around £10million, as it seeks to save £40 this year.