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The business behind a long-established footwear company which makes its shoes at a major facility in Lancashire has outlined details of a fundraising to accelerate its growth strategy and boost profitability.
Unbound, whose sole trading business is Hotter Shoes, is seeking to raise gross proceeds of approximately £4.3m to support its investment plans.
Formed in 1959 in Skelmersdale, Hotter positions itself as a comfort shoe for the over-50s and has an omnichannel model after pivoting towards digital following a CVA in 2020 when it closed the majority of its stores.
Investment from the fundraising will be focused on four key areas.
They include driving digital connection with its target customer base by growing its partner brand strategy and reactivating dormant retail customers through the expansion of its garden centre concession model portfolio.
As part of Unbound's expansion beyond Hotter Shoes, starting from 28 July, the group will on-board at least 14 partner brands, which will be sold on its new Unbound platform online. At the point of initial launch there will be seven brands live on site, which will be followed by a further Autumn/Winter launch in September 2022.
Unbound also intends to invest approximately £1m to £1.2m of the net proceeds of the fundraising in expanding its existing garden centre model to add more than 20 concessions over three years.
Investment will also be made in technology to improve the customer experience, deliver cost efficiencies and facilitate accelerated scalable growth and to enhance inventory effectiveness by utilising European suppliers with shorter lead time procurement of design-led finished and own-brand goods.
As part of Unbound’s omni-channel offering to its "increasingly digitally literate" customer base, the business is seeking to continue enhancing its digital channel.
It plans to invest approximately £750,000 to £1.5m of the net proceeds of the fundraising in its technology.
Additionally, the group has identified the procurement of faster-turning design-led comfort footwear ranges from third party suppliers with short lead time locations as an "incremental growth initiative".
Broadening the supply base to work with global best practice tier one factories with faster delivery times matches the group’s strategy of retaining the benefits and growth capacity of its UK manufacturing facility. Approximately £750,000 to £1m of the net proceeds of the fundraising will therefore be invested in additional fast moving inventory from these third parties, complementing and broadening the existing product offer and accelerating growth.
Currently about 75 to 80 per cent of Hotter Shoes' products are produced using specialist injection moulding techniques at its manufacturing facility in Skelmersdale. The facility has the capacity to produce approximately 63,000 pairs per week compared to 24,000 pairs on average currently, equivalent to about 2.5 million pairs a year (versus some 1 million pairs per annum currently), without a requirement for additional infrastructure spend. A culture of continuous efficiency improvement using Lean Six Sigma Principles is in place.
The on-shore production facility provides flexibility and resilience and is considered by the directors as one of the group's key strengths in terms of increasing availability and reducing lead times and cost.
Additionally, the group's carbon footprint from having a UK manufacturing facility is significantly reduced.
Singer Capital Markets Securities is acting as sole broker and bookrunner in connection with the placing and Singer Capital Markets Advisory LLP is acting as nominated adviser to Unbound in connection with the fundraising and admission.
Laurence Kilgannon, Digital News Editor T: 0844 980 0187 E: laurence.kilgannon@newsco.com
Adrian Simcox, Sales Director T: 0161 907 9745 E: adrian.simcox@newsco.com
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