Hotter Shoes parent Unbound considering restructuring

Hotter Shoes parent Unbound is considering triggering an emergency restructuring mechanism after attempts to sell the business stalled, it has been reported.

According to Sky News, Unbound has held talks with advisers at Interpath to kick off preparations for a restructure that would enable it to shed some of its liabilities. Should it go ahead, the move would require court approval.

The report frames the move as "contingency planning" but a restructure was deemed to be a realistic prospect as talks with potential buyers had stalled. The identities of any potentially interested buyers is not know.

Unbound kicked off a sale process in May after failing to secure additional funding – a potential £10m buy-out by the WoolOvers Group had fallen through – to complete its restructuring. It also revealed it had experienced worsening trading conditions.

Despite Unbound’s ability to make a bank repayment on 31 July, the company said that a temporary working capital shortfall could arise in September and October due to the planned build-up of inventory.

The group's ongoing debts included £1 million capital payments due on 31 July 2023 and 31 January 2024. This meant that any underperformance against its trading expectations would result in a worsening of the group’s cash position, it said.

Due to the challenging economic conditions, the group said it expected a pre-tax loss in the region of £4.25m and £4.75m.

Unbound said said at the time that it would pause activity on its newly launched multi-brand e-commerce platform, dedicated to the 50-plus consumer, and focus on its core comfort footwear brand Hotter.

Hotter had previously entered into a CVA during the pandemic in 2020, resulting in the permanent closure of 46 stores. It was left with 17 standalone stores and around 10 concessions in garden centres.

A spokesperson told Sky News it has "initiated a formal review of strategic options which included several possible outcomes, all of which are currently still under consideration".

"No decision has yet been made but as and when any progress or a conclusion has been reached, a further announcement will be made."