Hotter parent Unbound reports strong first quarter
By Josh White
Date: Thursday 12 May 2022
(Sharecast News) - Unbound Group reported a "strong" first quarter performance in its core business on Thursday, as it worked on its ambitious expansion plans targeting the over-55 market.
The AIM-traded firm was admitted to trading in February after being rebranded from Electra Private Equity, with its main operation currently being the footwear retailer Hotter.
Hotter performed "strongly" in the first quarter, Unbound said, delivering a double-digit increase in revenue against year-on-year, as well as an improvement in gross margin.
The company said it was seeing the benefits of its omnichannel strategy, with the performance of the retail estate being "especially pleasing".
It said Hotter's active customer base was still growing, with Unbound's email database now exceeding one million.
"Hotter has achieved this strong performance despite the macroeconomic backdrop of rising inflation, supply chain challenges and the impact of the Russia-Ukraine conflict," the Unbound board said in its statement.
"The board believes that the outlook for the external environment continues to look challenging for the remainder of this financial year, the performance highlights the strength of the Hotter brand, the resilience of the business model and the ability to adapt at pace.
"The group aims to continue mitigating some of these risks while continuing to grow."
Unbound said costs were being tightly managed with marketing, variable and fixed cost efficiencies being delivered as revenue grew.
The company said its ability to manage its cost base, its "right-sized" omnichannel model and its in-house manufacturing gave it the capacity to adapt to challenging market conditions.
Its board left the full-year outlook unchanged.
Looking at its strategy, Unbound said its aim was to capitalise on the digital strengths, customer loyalty and "powerful" database of Hotter to create a "curated online multi-brand retail platform" serving the over-55 demographic.
The group's growing customer database, currently totalling around 4.6 million, represents about 30% of the UK over-55 female population.
Initially, the group said it was planning to launch its partner brand offering within the footwear and apparel categories, followed by a "wellness offer".
Unbound reported a "high level of interest" in its platform, adding that since it launched its partnership strategy in January, it had secured a number of brands.
The names of new partners signed to date were yet to be announced, with the planned introduction of the platform set for the end of July.
Unbound said there would be a "full" autumn-winter launch of the platform from early September.
"I am delighted that the progress we have made in transforming Hotter continues to be translated into improved financial performance," said chief executive officer Ian Watson.
"The development of the Unbound Group platform is gathering pace and we have secured a number of exciting launch partner brands within footwear and apparel."
Watson said the company was engaged in positive discussions with a number of additional potential partners that would further develop its footwear and apparel offer, and launch its wellness proposition, to be followed by other target categories in phased implementations.
"We continue to be guided by our unique insight of our consumer base as we curate a range of products specifically for our target audience."
At 0914 BST, shares in Unbound Group were down 2.35% at 33.2p.
Reporting by Josh White at Sharecast.com.
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