Hotter to get £2m investment from Electra following CVA approval
Hotter Shoes is moving forward with plans to close the majority of its shops as part of a CVA and will receive a £2 million investment from its owner, private equity firm Electra.
The brand’s company voluntary agreement (CVA) was approved by 99.5% of creditors in late July, and the period in which lenders can challenge the outcome has passed. This means that the insolvency plan is now confirmed, giving Hotter the green light to implement the changes it needs to make to continue as a viable company.
Among other things, the struggling footwear retailer wants to accelerate its digitisation. With UK e-commerce sales growing by 11% in the first six months of the year, the online and direct-to-consumer channels will be prioritised over stores. Just 15 Hotter stores are expected to continue operating, with 46 set to close.
The £2 million investment was announced by Electra Private Equity on Thursday to confirm its support of Hotter’s CVA process. The money will go towards funding various strategic initiatives, including boosting the brand’s product development capabilities.
In June, Electra warned that Hotter could go into administration unless it secured backing for a CVA plan. The business was already working on returning to its direct marketing routes when the Covid-19 outbreak hit, and the lockdown accelerated the need for the strategy to be intensified.
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