(Alliance News) - Unbound Group said on Friday morning it was launching a strategic review that could result in a full sale of the company.

Unbound is the London-based parent company for a retail group selling a range of brands including Hotter Shoes. Shares in the company fell 29% to 2.30 pence in London on Friday.

The company said that the trading environment had worsened in the first quarter of the year, with revenues lower than anticipated.

Last September, Unbound said its revenue for the first half of 2022 was GBP27.6 million, with pretax loss at GBP2.1 million. In their latest trading update in January, the company said revenue growth slowed in the third quarter of 2022, with a small return to growth in December and January.

Unbound said at the time they expected full-year revenue in 2022 to be between GBP53 million and GBP54 million, up 3% and 4% from the previous year, but with a pretax loss of between GBP4.2 million and GBP4.8 million, below market expectations.

Unbound on Friday also outlined various findings and actions following the operating review that commenced on January 17. These actions focussed on a simplification of the group's business, focussing on the development of the core Hotter brand in the UK market.

Unbound said it had temporarily ceased its loss-making direct-to-consumer sales in the US and the EU, which brought in some 11% of revenue in financial 2023. The company also temporarily paused further development of the Unbound partnership platform to focus on incremental growth opportunities available from Hotter business in the short term.

The company warned that any underperformance against its trading expectations could worsen its cash position, and that a temporary working capital shortfall could arise in September and October this year. It continues to work with its advisers and banking partners to raise additional funds or refinance its current facilities.

Unbound emphasised that the sale of the company is only one of a number of strategic options, another is to seek a strategic investment in the company.

The company said it "is not currently in discussions with, nor in receipt of an approach from any potential offeror relating to an acquisition of the issued and to be issued share capital of the company."

By Will Neill, Alliance News reporter

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