Hotter Shoes saved as WoolOvers Group returns with rescue deal
All 421 jobs and 27 stores and concessions have been saved in a rescue deal for Skelmersdale-based Hotter Shoes.
Interpath Advisory was appointed as joint administrator to the business yesterday and immediately concluded a £6.7m sale to WoolOvers Group, which is backed by Scandinavian private equity business Verdane.
The company, part of the AIM-listed Unbound Group, has been adversely affected by difficult trading conditions in the retail environment, and despite taking steps to address costs across the business, creditor pressure continued to increase.
Will Wright, head of restructuring at Interpath Advisory and joint administrator, said: “High cost inflation and fragile consumer confidence is starting to place mounting pressure on companies up and down the high street.”
Jack Brazier, director at Interpath Advisory who advised on the transaction, said: “We’re pleased to have concluded this transaction which safeguards the future of the Hotter business, and wish WoolOvers Group all the very best for the future.”
Talks between Hotter Shoes owner Unbound and WoolOvers opened in March this year, but the following month Unbound said it favoured an approach from London-based investment company Marwyn Investment Management, instead.
However, in May, Unbound was forced to engage turnaround specialists from Interpath Advisory after Marwyn withdrew its £10m fundraising offer.
On Monday this week (July 17), Unbound announced the suspension of its shares and said it was about to appoint administrators after failing to raise funds or attract a suitable buyer.
In its latest published audited accounts for the 52 weeks ended January 30, 2022, Opco (Hotter Shoe) incurred a pre-tax loss of £1.3m. Its gross assets were £40.8m, including amounts owed by group undertakings of £20m, and net liabilities £3.9m at January 30, 2022. Its net bank indebtedness at July 14, 2023, was £9.7m.
The disposal of Hotter Shoes divests Unbound Group of its main trading business and it has no operating revenues. It currently has minimal cash balances and known creditors of approximately £0.9m.
While the company holds certain investments that the board believes are likely to have a value in excess of the amounts due, it is also likely to take some time to realise these assets and there is uncertainty as to whether the company is able to pay its debts as they fall due, it warned.
Unbound’s ordinary shares remain suspended from trading on AIM and the board of Unbound Group continues its review of options available to the company.
