// Hotter prepares to launch CVA
// It is looking to scale down radically as part of a restructuring plan
Hotter has said it is preparing to launch a CVA for the business as it looks to rapidly reduce its store portfolio.
The shoe retailer’s parent company Electra Private Equity said the management had been “in discussion with a number of its retail landlords to seek agreement to reduce the number of stores to a level and cost that allows Hotter to remain viable”.
However, it added that individual discussions have been unsuccessful in obtaining the required level of agreement to allow the retailer to continue.
Hotter is planning to enter into a CVA process in the next few days.
If the proposal is approved and successfully implemented, it will leave a trading estate of 15 shops, which means it will be scaling down radically from its current estate of around 80 stores.
The retailer has also launched a formal consultation process with a number of employees at its Skelmersdale head office that may lead to “a number of redundancies”.
Hotter has become the latest business to prepare for a CVA, after the high street saw several retailers turn to the process in a bid to survive during the coronavirus pandemic.
Other such labels including Cath Kidston, Oasis, Warehouse, and Laura Ashley have all struggled on the high street in recent months.
Earlier this year, Hotter appointed chief product officer Claire Pearl to give the business a more “stylish and modern” aesthetic ahead of its 60th anniversary this year.
“Before the pandemic hit, Hotter, under new chief executive Ian Watson, was making good progress to accelerate the implementation of a digitisation strategy to return it to its direct marketing routes,” Electra chairman Neil Johnson said.
“The need for these actions has been intensified by the consequences of the past three months of lockdown.
“If successful, the proposed CVA will result in fewer stores, which will secure the future of a smaller, sustainable business and will save over 350 jobs.”