Comfort footwear brand Hotter Shoes has announced its plans to undergo a company voluntary arrangement (CVA) process as part of its efforts to downsize its store chain to just 15 sites. The decision comes after unsuccessful discussions with retail landlords to reduce store numbers and costs amidst the ongoing Covid-19 pandemic. If approved and implemented, this move will lead to a significant reduction in Hotter Shoes’ current estate of approximately 80 stores. However, it is important to note that the CVA process may also result in a number of job redundancies, as the company has launched a formal consultation process with employees at its head office.
Hotter Shoes now joins a growing list of businesses that were performing well before the coronavirus crisis but have struggled to survive the impact of the lockdown. Some other companies facing similar challenges include Cath Kidston, Oasis, Warehouse, and Laura Ashley.
Earlier this year, Hotter Shoes took a significant step by engaging an external marketing agency for the first time, as part of its refreshed strategy. In addition to this, the brand had made progress in recovering from a difficult period in 2018. It had implemented predictive technology and hired new designers to enhance its product offerings in preparation for its upcoming 60th anniversary in 2020.
Neil Johnson, the Chairman of Electra, expressed his thoughts on Hotter Shoes’ decision to undergo a CVA process. He stated that the brand had been making strides in its digitalization strategy under the leadership of new CEO Ian Watson. The impact of the past three months of lockdown has further emphasized the urgency of these actions. If the CVA is successful, Hotter Shoes will be able to secure a smaller, but sustainable business and save more than 350 jobs.
This move by Hotter Shoes serves as a reminder of the challenges faced by the retail industry during the ongoing pandemic. With evolving consumer behaviors and economic uncertainties, many companies are finding themselves in a position where difficult decisions must be made in order to ensure their survival.