HOTSPOTS WEST LANCASHIRE
WHEN HOTTER WENT COLD
by Ged Henderson
IN ASSOCIATION WITH:
It was May 2021 and Hotter Shoes chief executive Ian Watson was confident the UK’s biggest shoe manufacturer was making great strides towards new owners and a bright digital future.
In a detailed interview with Lancashire Business View he outlined the ambitious strategy for the Skelmersdale-based company to become a digital-first retailer.
It looked to be paying off as the world emerged from the pandemic, with online sales rising and 90 per cent of its new customers over the previous 12 months acquired through digital channels.
It was also a major step change for the retailer which operates from a site at West Pimbo and which had historically conducted much of its business through mail order.
Hotter, owned by Electra Private Equity, was at this stage selling more than 1.3 million pairs of shoes a year and employing some 500 workers.
It had gone through a rocky period. In July 2020, after a company voluntary arrangement proposal was given the green light from creditors, the business had permanently closed 59 of its 82 stores, a move which led to the loss of just shy of 400 jobs.
Ian Watson was now looking to get Hotter back on the front foot, with tech- led plans that included 3D foot scanning machines and augmented reality fittings taking place in ‘shoe shops with no shoes’.
“We’re still on course to sell the business at some point this year,” the chief executive, who had been recruited to reposition Hotter as a leading name in e-commerce, declared. “We’re getting it in good shape for that auction to take place.
“We have successfully remodelled the business for further growth in terms of sales and profitability.”
Fast forward to July this year and a very different story. It was a month that saw the appointment of joint administrators to Beaconsfield Footwear, the company trading as Hotter and the main trading subsidiary of AIM-listed Unbound Group.
In a statement, the administrators from Interpath Advisory revealed: “The company 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.
“As a result, Interpath Advisory was engaged to examine the options available to the company.
“Following an extensive exploration of options, it became clear that it would not be possible to conclude a transaction on a solvent basis
and, as such, the directors took steps to seek the appointment of administrators.”
Immediately following their appointment, those joint administrators concluded a pre-pack sale, for a reported £6.7m, to an entity controlled by WoolOvers Group. It was a deal which they said safeguarded the future of the Hotter business.
As part of the sale to WoolOvers, which is backed by Scandinavian private equity business Verdane, all 421 current employees and Hotter’s 27 stores and concessions have been transferred across to the new owner.
Clothing brand WoolOvers had made an unsuccessful attempt to buy Hotter in April this year. A month later the struggling footwear company announced that a £10m funding proposal from Marwyn Investment Management had fallen through.
Commenting on the background to Hotter’s troubles, 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.”
In an interview with trade magazine Drapers following the acquisition WoolOvers, chief executive Mike Lester revealed some of its plans for Hotter, which included bringing back a mail order catalogue for the new season.
Describing it as a heritage brand, he said: “We are trying to stabilise the business and to focus on getting the stock in place for autumn/winter.
“We will start direct mail marketing again. Historically, the business has had a strong catalogue-driven business, driving traffic both online and into call centres.
“We will continue to operate its own standalone e-commerce property and we intend to run the brand as a distinguished entity.”
He added: “We absolutely plan to continue operating all the stores and concessions. We see them as a key tool to engage with the customers and a key part of the heritage.”
That heritage can be traced back to 1959 when the business started life as a family-owned slipper company.
Today the clear message from its new owners centres very much on stabilising the business. In the words of Mike Lester: “It’s a well- loved heritage brand and we want to get it up to where it was as quickly as possible.”
Its workforce and the wider West Lancashire community will be hoping it won’t be too long before Hotter days are here again.
LANCASHIREBUSINES SV
IEW.CO.UK
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