Unbound Group seeks sale of Hotter Shoes after failing to secure funding

Unbound Group, the owner of Hotter Shoes, is debating the sale of the company after failing to secure additional funding to complete the company’s restructuring.

Despite Unbound’s ability to make a bank repayment on 31 July, the company anticipates 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 include £1 million capital payments due on 31 July 2023 and 31 January 2024. This means that any underperformance against its trading expectations would result in a worsening of the group’s cash position.

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

The company added that the anticipated shortfall "could be addressed via working capital management and other measures that are ready to be implemented if required, [but] also believes that such measures could damage the long-term growth prospects of the group".

Aside from a full sale of the company, the board is also considering other options such as raising additional funding from a specialist debt provider or strategic investor, from the accelerated sale of its trade assets or of the shares in its main operating subsidiary.

Earlier this week, Unbound said it would pause activity on its multi-brand e-commerce platform as it focuses on its core Hotter brand following tough trading results. The group will hold all activity on the site, which launched last July, and will replace the homepage with a holding page in the upcoming weeks.

In March, the company confirmed it was in discussions with WoolOvers Group “in relation to a possible cash offer" for the entire issued share capital of Unbound. However, the £10 million investment deal was withdrawn earlier this month due to “concerns over its current trading”, according to Marwyn Investment Management.