Unbound Group, the parent company of Hotter footwear, has provided an update on its trading performance and expressed disappointment with the second half of the year. The company cited various challenges, including a prolonged heatwave, postal service strikes, and broader economic conditions, as contributing factors to weaker sales. However, there was a small return to growth in December and January after a poor Q3 and November performance.

Despite the setbacks, Unbound expects full-year revenue to increase by 3%-4% to £53 million-£54 million compared to the previous year. Gross margins are in line with expectations, and the company projects a pre-IFRS16 adjusted EBITDA loss of £0.75 million-£1.25 million. The adjusted pre-tax loss, excluding exceptional costs and after non-recurring costs of approximately £1 million, is estimated to be £4.25 million-£4.75 million, which is below market expectations.

Unbound believes it is well-positioned for the launch of its SS23 product portfolio, with balanced inventory levels. The company plans to introduce new product styles, including athleisure products, based on successful sourcing trials. Additionally, Unbound has seen 11 partner brands join its extended platform in the past five months and anticipates signing more partnerships in 2023. However, the partnership model has had a slower start due to management’s focus on the core Hotter brand.

To drive efficiency and growth, Unbound has identified annualized cost savings of £2.3 million within its existing operating model and has already realized £1.3 million of those savings. An additional £1 million will be realized in the next two quarters. The company is also reviewing its operating structure to simplify processes and drive revenue and profit growth. This includes considering strategies for its US business, expanding the product range, and further developing the trading platform.

Unbound plans to share more details about its plans and FY23 results in May. CEO Ian Watson expressed disappointment in the second-half trading performance but remains confident in the long-term future of the Hotter brand and the wider Unbound platform. The company aims to expand its product range based on customer insights and forge strategic partnerships with brands that target its key demographic.

Useful links:
1. Hotter footwear
2. Unbound Group