The restructure, via a company voluntary arrangement (CVA) process, may involve “a number of redundancies” at its Skelmersdale head office.
Neil Johnson, Electra Private Equity PLC Chairman, commented:
"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 3 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.”
In their statement, Electra Private Equity PLC explained that negotiations with Hotter Shoes retail landlords to reduce costs had been unsuccessful.
Sales channel transition from physical to digital
Electra Private Equity PLC comment on their website: “a sales channel transition from physical retail and analogue “direct to consumer” to digital “direct to consumer” gives the opportunity for transformative operating efficiency improvements.
Following the assembly of a new management team led by Ian Watson in 2019, the business has accelerated the implementation of a digitisation strategy that will return Hotter to its direct marketing roots, with an updated model to focus on supplying its target demographic with product differentiated through comfort and fit, primarily through digital direct channels.
Whilst over 70% of profits already come from the direct channels in the UK and US, Hotter’s strategy is to grow its direct business, particularly online, whilst over time reducing its UK retail footprint to a sustainable level.”
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