The owner of Hotter Shoes has put itself up for sale as it warns it could struggle to pay its upcoming bills.
Skelmersdale-headquartered Unbound Group has appointed Interpath Advisory to act as joint financial adviser alongside Singer Capital Markets Advisory LLP to manage a strategic review and formal sale process.
The move comes after the group missed out on a planned £10m investment earlier this month after the offer was withdrawn because of concerns over its current trading.
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Last month the group also suffered a blow when a knitwear and jersey brand backed away from a possible £7m takeover.
Shares in Unbound Group fell by more than 15% in early trading to 2.75p each.
In an update to the London Stock Exchange, Unbound Group said the trading position in the second half of 2022 has left it with "cash constraints".
It added: "The group's ongoing debt service requirements (including £1m capital repayments due on 31 July 2023 and 31 January 2024 under the existing banking arrangements) mean that any underperformance against the board's trading expectations would result in a worsening of the group's cash position.
"The board anticipates that the group will be able to make the scheduled bank repayment on 31 July 2023, however, based on the board's current plans for the group, a temporary working capital shortfall could arise in September and October 2023 due to the planned build-up of inventory ahead of the launch of AW24.
"Whilst the board currently believes that this anticipated shortfall could be addressed via working capital management and other measures that are ready to be implemented if required, the board also believes that such measures could damage the longer term growth prospects of the group.
"The group is maintaining its regular dialogue with its core banking partners who have continued with their support throughout this period, including the waiver of certain covenants under existing borrowing facilities.
"The board re-confirms that it is likely that the group will require further covenant waivers or deferrals in the short-term and will continue with its constructive dialogue with its banking partners.
"The board previously communicated that it was in discussions regarding an injection of further equity to recapitalise the group but announced on 10 May 2023 that these discussions had been terminated.
"The board is continuing to work with the group's advisers and banking partners with a view to raising additional funding or refinancing its existing borrowing facilities in order to provide the appropriate balance sheet structure and level of working capital headroom.
"As a consequence of the factors described above, the board has also decided to initiate a formal review of strategic options available to the group, including a formal sale process, pursuant to which the board will consider the options available to maximise value for the company's shareholders and the group's other stakeholders.
"Such options could include, but not be limited to, a full sale of the company, raising additional funding from a specialist debt provider and/or strategic investor and/or by realising value from an accelerated sale of the group's trade and assets and/or of the shares in the group's main operating subsidiary."
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