Hotter Shoes to launch CVA as it looks to shrink store estate

The owner of Hotter Shoes has announced it intends to restructure the British footwear retailer through a company voluntary arrangement (CVA) process.

Electra Private Equity announced Friday that following the emergence of the Covid-19 pandemic, Hotter Shoes has been in talks with a number of its landlords to seek agreements to reduce the size of its store estate “to a level and cost that allows Hotter to remain viable.”

However, these individual discussions have been unsuccessful and therefore the company said it will be entering into a CVA process in the coming days.

If the CVA gets the green light and is successfully implemented, Hotter Shoes will end up with a trading estate of 15 stores. The chain reportedly has around 80 stores at the moment.

Hotter Shoes eyes store closures

The company has also entered into formal consultation with several employees at its Skelmersdale head office “that may lead to a number of redundancies.”

Neil Johnson, Electra Private Equity PLC chairman, said in a statement: “Before the pandemic hit, Hotter, under new chief executive Ian Watson, was making good progress to accelerate the implementation of a digitisation strategy to return it to its direct marketing routes.

“The need for these actions has been intensified by the consequences of the past three months of lockdown. If successful, the proposed CVA will result in fewer stores, which will secure the future of a smaller, sustainable business and will save over 350 jobs. I would like to thank all our colleagues at Hotter for their continued understanding at this difficult time.”

Other British fashion companies struggling in recent months due to the added strain of Covid-19 include Cath Kidston, Laura Ashley and Debenhams, which all fell into administration.

On Monday, JD Sports announced it was considering a number of ‘strategic options’ for its Go Outdoors brand - a move that will likely result in the hiking and camping chain entering administration.

Photo credit: Hotter Shoes, Facebook