Unbound Group Enters Formal Sale Process After Strategic Review

Unbound Group, owners of Hotter Shoes, announced that it has entered the sale process following a strategic review amid declining revenues.

According to Unbound, the company’s position in the second half of 2022 has left it financially strapped, forcing its management to seek additional financing to complete the restructuring and ensure its long-term viability.

The Group’s ongoing debt service needs, including £1m of capital repayments due in July 2023 and January 2024, mean that underperformance could result in a deterioration in liquidity; the repayment in January 2024 is under particular pressure.

For these reasons and in view of the possible impact on future growth prospects, the Group has decided to initiate a formal sale process as well as a formal review of other available strategic options.

Interpath Advisory has been appointed as joint financial advisor with Singer Capital Markets Advisory, managing both processes.

While noting that no prospect has been contacted or in talks, the company added that it is also looking at a strategic investment as an alternative to a sale.

Unbound ceases US and EU operations and reviews development of
product portfolio. The news comes after Unbound’s management overhauled the company’s operating structure to streamline operations and processes, including expanding its product line, developing its trading platform and shaping its future US operations.

In addition, Unbound has also embarked on a cost-cutting programme, which is expected to result in annual savings of around £2.3m, now expected to be realized by Q3 FY24.

W In response to a review inquiry, Unbound has refocused on its core Hotter brand in the UK market and plans to further develop its product portfolio to offer more choice.The group also completed loss-making direct-to-consumer sales in the US and EU, which contributed 11% of sales in FY23, and its multi-brand platform. The decisions were taken after Marwyn Investment Management pulled out of a potential £10m investment earlier this week after Marwyn said there were “current sales issues”. Unbound reported a “challenging” Q1 environment going into early 2023, with “deteriorating conditions compared to those outlined in the FY23 Business Update.”

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