// Hotter owner Unbound mulls full sale as the board continues to seek additional funding
// The group warned that while it will be able to make a bank repayment in July, a temporary working capital shortfall could arise in September and October
Unbound Group is looking to sell the company as the board continues to seek additional funding to complete the firm’s restructuring.
The parent company of Hotter Shoes said that although the board anticipated it will be able to make a scheduled bank repayment on July 31, a temporary working capital shortfall could arise in September and October due to the planned build-up of inventory ahead of the launch of autumn, winter 2024.
Unbound has appointed Interpath Advisory as joint financial adviser alongside Singer Capital Markets, its current financial adviser, to manage the formal sale process.
The company’s anticipated shortfall could be addressed via working capital management, as well as other measures. These measures, however, could damage its longer-term growth prospects, Unbound said.
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The company will require further covenant waivers or deferrals in the short-term, and it will continue discussions with banking partners.
Aside from a full sale of the company, the board is also considering other options such as raising additional funding from a specialist debt provider or strategic investor, from the accelerated sale of its trade assets or of the shares in its main operating subsidiary.
Under AIM’s takeover code, Unbound Group was now considered to be in an “offer period” so as to allow conversations with interested parties to take place.
At the start of the week, Unbound said it would pause activity on its multi-brand ecommerce platform as it focuses on its core Hotter brand following tough trading results.
The group will hold all activity on the site, which launched last July, and will replace the homepage with a holding page within weeks.
The group said it expects a pre-tax loss in the region of £4.25m and £4.75m, blaming the extended summer heatwave, Royal Mail strikes in December and “broader economic conditions”.
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