The Interview: Ian Watson, CEO Unbound Group
Ian Watson didn't get the memo that said we should all take the opportunity to slow down during the pandemic. To say he's been busy is an understatement but, then again, he is on a mission to create a platform to enable the over-55s (not that's he's in that age bracket himself just yet) to "do more of what they love". And what Watson loves is his job. Speaking to TheIndustry.fashion shortly before the newly formed Unbound Group, parent of Hotter Shoes, floated in London, Watson explained: "I've got a favourite quote: 'Without passion there’s no excellence'. And I just love my job."
Watson took on the role of CEO at Hotter Shoes, the over-55s comfort footwear brand, in March 2019, knowing it needed a radical restructure. With the support of then owners Electra Private Equity, he executed a CVA for the business at the height of the pandemic in the summer of 2020, which led to the closure of around 46 of its then 61 stores. It emerged from the CVA with a fresh injection of cash from Electra and pivoted to a digital-first model.
Shortly after this, it explored the opportunity of a sale of the business, since Electra had pledged to return assets to its shareholders during 2021. However the conclusion was that there was such inherent value in the business (it has 4.6 million active customers in a lucrative demographic), that the best thing to do was to create a brand new entity (Unbound Group), which would lead to the launch of a fully fledged fashion, lifestyle and wellness platform for the over 55s. Oh, and before that happened, he needed to float it.
Yesterday (1 February 2022), Unbound Group was officially admitted to London's junior stock market, AIM, where shares are now trading at about 59p per share.
It's fair to say that the prospect of taking all of that on might not have been the most attractive prospect for any CEO, even though at the time he took on the job Watson could not have foreseen that he'd have a pandemic thrown into the mix. But, he says, he jumped at the chance when it came up.
Watson had been CEO at children's footwear brand Start-Rite between 2016 and 2019, where he executed a turnaround, and, before that, had been European managing director at Britax Childcare where he was part of the team that sold the business to Nordic Capital. Prior to that he worked at a large US conglomerate. "I was approached through [executive recruiter] Egon Zehnder to say 'we've got a great opportunity for you'. I was in London within three hours and took the job. It fitted with me, the turnaround style and the private equity side. It's been a really fruitful relationship with Electra," he explains.
Indeed, Electra's chairman Neil Johnson, has become a non-executive director of Unbound, providing continuity and vast expertise – he has chaired Motability Operations, Centaur Media and Synthomer, and has been CEO of the RAC among many other high profile roles.
So, what is Unbound? Apart from Hotter Shoes (more about which soon), it will be a platform housing brands, products and content that speak to the new, active lifestyles of the over-55s, who are often poorly served by other fashion and lifestyle retailers. "We will curate a range of products for this demographic," says Watson of the platform that will start trading towards the end of H1.
"A lot of companies are trying to edge down their customer age range but we're not going to do that. People ask me who our rivals will be in this space and I say 'I can't tell you that'. No one is a real specialist.
"We will take our knowledge of this consumer base and our specialism [to create the e-commerce platform]. There will be a number of handpicked brands and we've developed our own range of apparel and wellness products. There will also be content development around this community, who don't want to be condescended or spoken to as a stereotype," he says.
Content will be central to the proposition as it's an area other brands can get so wrong. "What happens when you hit 50? You start getting emails about cruises and it's like 'welcome to your 50s'," he says. "I started thinking about that and asking 'what if we do that in a more engaging way?'"
The list of brands that Unbound will partner with has not yet been revealed, but the Hotter Shoes brand, which Watson has reinvigorated, will remain central to the proposition. Made in the UK at the brand's Lancashire factory, the shoes have tech-enabled comfort at their core. For a start, it has introduced foot-scanner technology to ensure consumers shopping online (or via its app, which is hugely popular among its customer base) can receive a customised comfort fit.
Ranges include Comfort+, which offers superior comfort courtesy of bespoke compounds which deliver "an improved energy return and higher rebound". Meanwhile styles in its Stability+ range benefit from a balance bar and are fitted with an OrthoLite® insole, making the shoe both secure and extra breathable. These shoes also feature adjustability points on every shoe which means they can be tailored to fit the shape of the wearer's foot.
Watson is trying to encourage adults to get fitted for shoes regularly, just as children do, and to think about buying new shoes in the same way you might buy a new pair of glasses. "Everybody’s feet change as they get older. You wouldn’t think twice about getting your eyes tested twice a year," he says.
Customers have embraced the technology and, while the company still produces around 18 printed catalogues a year and services customers through a dedicated call centre, they have become much more enthusiastic about shopping online.
"There's been a step change in speed in how long that [shift to digital shopping] takes to evolve during the pandemic. People in their late 70s to 80s are now used to shopping for groceries online. It's absolute nonsense that people who are in their 70s are not digitally savvy. It’s nonsense; they’ve all used more technology during this period," Watson says.
But, despite the fact that the retail estate was dramatically cut back during the pandemic, Watson remains open minded about opening stores (indeed a garden centre concession has recently been opened with partner Notcutts) but now, he's taking a different approach.
"We looked long and hard at should we close all of retail. We know retail stores work as great bramd amplifiers. We like retail but I really like profitable retail. The stores we kept were either profitable or had the ability to be profitable. We’re not saying no to more profitable locations," he says.
The stores that have remained open now carry 50% less inventory than they did pre-pandemic and the emphasis on the stores is all about fitting services and brand amplification. A new retail concept is being trialled in Solihull which features a 3D foot scanner and a kiosk where shoppers can browse and buy the full range, once they have their measurements.
Watson was inspired for this approach when he went shopping for trainers at the New Balance store on Oxford Street in London. He was asked to try on a pair of trainers (not the specific model he wanted) to confirm his size but the store didn't have the size available in the particular shoe he wanted. "They didn't say they didn't have my size, they just asked if I was out shopping for anything else that day and said 'instead of having to carry them around, why don't we have them sent to your home tomorrow?'," he recalls.
Customers, he believes, are more than willing to wait for the right product and not having a store packed with inventory (and working capital) that isn't selling is far better for a business.
As well as the shake up of retail, the product range, the digital channel, coping with the pandemic and preparing for the float, Watson also found time to implement efficiencies and more environmentally sound practices in its manufacturing process.
You have to wonder what on earth drove him through all of that (surely there's only so far a Hotter "Infinergy" sole can take you, even if it does promise to, literally, put a spring in your step?). But, he claims, it simply comes back to loving what you do and being prepared to say yes, when others would take the easy option and say no. In addition, the responsibility of securing a future for the business's staff pushed him to succeed.
"It could have failed but we employ over 500 people, they’ve got a job and it’s a fun place to work," he says. "You've just got to try to be the best version of yourself. Did we make some mistakes? Damn right we did. Did we get the big decisions right? I think so."