Unbound shares plunge after profits warning

Shares in Hotter Shoes owner Unbound Group plunged on Tuesday after the group issued a profits warning and said it would review operations.

The company, which sells mainly to the over-55 demographic, said expected to post an adjusted pre-tax loss for the year to February 5 of £4.25m-4.75m compared with a company-compiled forecast of a £1.2m loss.

"Since our strong start to the year, trading in the second half has been disappointing, with weakened demand from the current economic slowdown and a number of external factors. However, we are pleased that margin discipline was maintained," the company said on Tuesday.

Revenue was forecast at £53m-54m, lower than the £57.7m forecast and a core loss of £0.75m-1.25m against an earnings estimate of £2.3m.

Unbound cited the extended period of hot weather, UK postal strikes and broader economic conditions, which hit sales of its Autumn/Winter range in the final five months of the year.

The company said it would now review its operating structure in order to simplify processes and cut costs.

"In reaction to the challenging trading environment, our strategic focus is centered around growth and simplification. The group will also generate significant annualised cost savings which will be fully implemented by the end of October 2023," it said in a trading update.

"Our core brand Hotter retains a highly loyal and engaged customer base. We will focus on a broader product range, driven by our insight into our customer's needs, attitudes and behaviours. In reaction to the challenging trading environment, our strategic focus is centred around growth and simplification. The group will also generate significant annualised cost savings which will be fully implemented by the end of October 2023."

Reporting by Frank Prenesti for Sharecast.com