Hotter Shoes plans CVA, will shrink store chain to just 15 sites
The owner of comfort footwear brand Hotter Shoes issued a brief statement on Friday saying that it’s planning a company voluntary arrangement (CVA) process for the business.
Electra Private Equity said that following the emergence of the Covid-19 pandemic, Hotter 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”. But “individual discussions have been unsuccessful in obtaining the required level of agreement to allow Hotter to continue”.
It’s therefore planning to enter into a CVA process in the next few days. If the CVA proposal is approved and successfully implemented, it will leave a trading estate of 15 shops.
That means it will be scaling down radically from its current estate of around 80 stores.
The company 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”.
The company is yet another name to add to the list of businesses that had seen improving fortunes before the coronavirus crisis but that weren’t strong enough to deal with the massive shock to the system that the lockdown created.
Other such labels including Cath Kidston, Oasis, Warehouse, and Laura Ashley.
Earlier this year, the brand had appointed an outside marketing agency for the first time as it sought to make the most of its refreshed strategy and late last year it also announced that it had started its sales recovery after a very difficult 2018. It also said it had upgraded the way it responded to trends, using predictive technology, and also hiring new designers to work alongside chief product officer Claire Pearl on a more “stylish and modern” aesthetic ahead of its 60th anniversary in 2020.
Electra’s chairman Neil Johnson said of the CVA move: “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.
“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.”
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