Unbound hoists for sale sign, shares slump

Shares in Unbound Group plunged on Friday, after the beleaguered retailer put itself up for sale.

The AIM-listed firm, which owns Hotter Shoes, said it was facing cash constraints after failing to secure fresh funding in light of weaker-than-expected first-quarter trading.

While it still expected to make a scheduled bank repayment at the end of July, Unbound warned that a cash shortfall could arise in September and October as inventory built up, and that it could require further covenant waivers from its banks.

It has therefore launched a review of all possible strategic options and started a formal sale process.

As at 0915 BST, shares in Hotter had tumbled 20% to a record low of 2.6p.

Unbound launched an operating review in January alongside a cost-cutting programme, in light of challenging economic and market conditions.

Following the review’s completion, Unbound said it wanted to simplify the businesses as well as improve the product portfolio to offer customers more choice.

It has also paused further development activity in the Unbound Partnership Platform, as it focuses on the core Hotter brand, and temporarily ceased direct-to-consumer sales in the US and European Union excluding Ireland. The business was responsible for around 11% of group revenues, but was loss-making.

Unbound said it was not currently in takeover discussions, and noted it was also still considering a potential strategic investment.

Earlier in May, discussions regarding a £10m equity injection from Marwyn Investment Management fell through on the back poor trading.