Hotter owner starts transformation with new name and category expansion
The owner of Hotter Shoes is gearing up for a transformational year as it changes its name, relists on a new exchange and moves into new categories such as clothing, as well as adding third-party brands.
Electra Private Equity Plc on Monday confirmed its intention to change its name to Unbound Group PLC, and as an “online multi-brand retail platform supporting the lifestyles of the 55+ demographic”, it will be relisted as such on AIM at the end of this month.
Electra was previously listed on the FTSE Main Market but the junior AIM exchange is preferred by a number of big names in fashion such as ASOS and Boohoo Group.
The company also said it will “build on the solid foundation of its current main business, Hotter Shoes, to grow value through its curated multi-brand retail platform supporting the active lifestyles of the 55+ age demographic with a range of products and services”.
What does that mean in practice? The offer will be expanded beyond footwear and is expected to include clothing, wellness and lifestyle products and services, “with third-party complementary brands featuring alongside new Unbound brands, as well as Hotter”.
It will also continue to develop Hotter’s footwear offering that’s hugely popular among its target consumer group.
And that group is key to its ambitions as it’s a cash-rich collection of consumers often frustrated by a fashion and lifestyle sector obsessed with chasing the youth market.
The company said it “intends to leverage the highly attractive customer database and scalable digital infrastructure of Hotter to support sales on the new Unbound platform of its own and third-party brands and products with related customer benefits to the same target demographic. This development of the curated platform will be through working with similarly focused partners to provide a range of products and services that support the wellbeing and active lifestyles of Hotter's customer community”.
The current CEO of Hotter Shoes, Ian Watson, will lead Unbound as a whole.
Hotter has pivoted in recent periods to move from a store-based and mail order operation to one that’s predominantly online today. And that appears to be working for the company as it said it now sells its footwear products to over 29% of the UK 55+ female population through its direct-to-consumer channels.
Current digital revenues account for more than 75% of turnover and its target age group increasingly shops online. It added that there’s a high concentration of UK wealth in the group, as well as a focus on “value rather than price”.
And it said that the digital platform being built by Unbound “allows the development of a low-risk, mutually beneficial arrangement with select partners, which will provide customers in the targeted 55+ demographic not only with relevant and lifestyle enhancing products and services but ultimately also a community platform”.
“Initially targeted Unbound brand partners have been identified and commercial negotiations are in progress with multiple parties”, we’re told.
The first revenues from sales of products other than Hotter footwear are expected in Q2, with a medium-term ambition to generate more than half of Unbound's profit from non-Hotter products.
Meanwhile Ian Watson said Hotter continued to deliver strong growth during November and December, with revenues being up 9% compared with the previous year and the gross margin continuing to perform positively at 65.5%.
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