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Unbound Group initiates sale process

Unbound Group, the owner of Hotter Shoes, has said it is embarking on a strategic review while putting itself up for sale. The company announced back… View Article

FASHION RETAIL NEWS UK

Unbound Group initiates sale process

Unbound Group, the owner of Hotter Shoes, has said it is embarking on a strategic review while putting itself up for sale.

The company announced back in January that it was reviewing its operating structure with a view to streamlining activities and simplifying processes in order to drive revenue and profit growth. It also announced a cost reduction programme.

Following its announcement on 10 May that its trading environment had worsened in the first quarter of its new financial year, the group has now appointed Interpath Advisory to manage the strategic review and formal sale process, alongside Singer Capital Markets Advisory, its current financial adviser. 

Unbound is expecting to be able to make a scheduled bank repayment on 31 July, However, it said a temporary working capital shortfall could arise in September and October due to a planned build-up of inventory ahead of the launch of its autumn/winter collections.

The group said: “Whilst the board currently believes that this anticipated shortfall could be addressed via working capital management and other measures that are ready to be implemented if required, the board also believes that such measures could damage the longer term growth prospects of the group.”

Unbound is maintaining its regular dialogue with its core banking partners who have waived certain covenants under existing borrowing facilities. The group said it is likely to require further covenant waivers or deferrals in the short-term.

Unbound’s cost cutting activities meant that its first quarter profit was broadly in line with expectations. The group is continuing to seek the additional funding needed to complete its restructuring and to ensure its long-term profitability.

In addition to a company sale, Unbound said its other options could include raising additional funding from a specialist debt provider or strategic investors, or selling off Hotter Shoes.

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