Key Investments

This page shows Electra's current significant Buyouts and Co-investments (valuation as of 30 September 2018).

Hotter Shoes
Shoes designer, manufacturer and retailer

Hotter Shoes

Year ended 31 December    
  2017 2018
  £m £m
Sales 98.0 100.8
Operating Profit 4.3 5.0
EBITDA 9.0 9.5

Hotter operates in the comfort footwear market primarily in the UK and US, where demographic changes offer significant opportunities for growth over the long-term. Following Electra’s purchase of the founder’s interest, the company has been able to invest in necessary initiatives to enable future growth. These are aimed at developing the brand and product to remain relevant to customers whilst investing in key operational areas to increase the efficiency and flexibility of the cost base.

Difficult trading conditions in the UK, coupled with increased rents and rates in the retail estate, have affected recent performance of the UK business, and reduced the year end valuation. In particular, severe snow in March and a long hot summer delayed key periods of the trading calendar, which led to discounting by Hotter and its competitors to ensure stock held was sold. As the autumn/winter season approaches its peak, the refreshed product range has seen performance improve as the effects from external factors reduce.

Hotter has achieved significant growth in the US market over recent years by substantially increasing its customer base with extensive use of introductory offers. Sales are now of a sufficient scale to enable focus to shift towards creating a sustainable business with loyal, repeat customers.

The strategy in the short-term is to optimise the retail estate, renew focus on the core customers in the UK direct business, increase return from the US business and make the cost base more flexible. This is likely to result in a smaller but more resilient business which represents a solid foundation for growth.

Activity:

Shoes designer, manufacturer and retailer

Date of initial investment:

January 2014

Type of deal:

Buyout

Equity Ownership:

98%

Cost:

£118m

Valuation:

£7m

Multiple of cost:

0.1x

Location:

International

Website:

www.hotter.com

Management:

Sara Prowse, CEO

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