Speculation is growing about the future of Hotter Shoes’s CEO Ian Watson.
Last week the troubled shoe manufacturer was sold by administrators to WoolOvers in a pre-pack sale.
It followed a dramatic fall in fortunes of the award-winning Skelmersdale-headquartered company, which has been under Watson’s leadership since March 2019.
BusinessCloud has been told by more than one source that Watson, who previously worked as CEO of Start-Rite Shoes, no longer works at the company but neither Hotter Shoes or WoolOvers Group have responded to several phone calls or emails.
However in an interview in the fashion publication Drapers with Mike Lester, CEO of WoolOvers, it’s been reported that Watson stepped down following the pre-pack administration.
Despite that he still appears on the website of Hotter Shoes’ parent company Unbound and is listed as a director at Companies House.
However speculation has been growing about his future after administrators sold Hotter Shoes to WoolOvers Group in a pre-pack sale.
The company’s fortunes have plummeted since 2015 when it was crowned Manufacturer of the Year, beating Rolls-Royce and Jaguar Land Rover in the process.
At the time the company’s turnover was £96m with EBITDA of £12m and a stated goal of doubling in size.
By 2017 the company was the UK’s largest shoe manufacturer, employing 1,400 people and producing more than 2.2 million pairs of shoes per year at its factory in Lancashire.
However, when the company was rescued following its sale to the WoolOvers Group, staff numbers had dwindled to just 421.
Analysts have blamed the collapse on a combination of Covid-19 and a change in direction.
They include Watson’s decision to put significant resources into creating a marketplace website called Unbound to compete with the likes of Very, M&S and Next.
Others have questioned Hotter’s decision to pursue a strategy of sourcing more shoes from overseas instead of making the shoes in their own world class factory.
One industry expert spoken to by BusinessCloud said Hotter Shoes needed to focus its attention on serving its core customer base.
The industry expert said: “Hotter Shoes’ core customer was 50+ and mainly women. They used to devote a lot of time to understanding what ‘Mr and Mrs Hotter’ wanted and it was a strategy that worked. The company was profitable and stable.”
While other UK shoe manufacturers struggled, Hotter flourished on the back of a major investment in technology and automation to make the company capital intensive rather than labour intensive.
Hotter lived by its four core values – brand, customers, comfort and people – and invested in its own 120-seat call centre to field calls from the UK and US markets.
However things began to unravel in the years either side of Covid.
In 2019 the then CEO Sara Prowse, who is now the highly respected CEO of UA92, was replaced by Watson.
Hotter’s main shareholder, Electra Private Equity, decided not to press ahead with its planned US growth plan and IT transformation and Watson moved the business model away from being store-led to eCommerce-led.
The industry expert said: “Ian wanted to target the younger customer and introduced technical innovations like feet scanning.
“They went for growth, which looked good on paper, but they began to lose their focus on their core customer.
“Hotter had really high Net Promoter Scores (NPS) and customer loyalty but the decision was taken to create a marketplace website called Unbound, which Hotter Shoes sat within.
“You could still buy Hotter Shoes on the Unbound website but you could also buy other brands like M&S .
“Amazon do it really well but if you’re going to create a new marketplace you need to invest in technology, logistics and customer services.”
Senior staff left and then Covid hit.
Initially Hotter Shoes seemed to benefit from the boom in online shopping but while other retailers survived the pandemic, Hotter Shoes continued to see a fall in sales and it lurched towards administration.
In the days before being bought by WoolOvers, trading in Unbound – which listed on the London Stock Exchange in February 2022 – had been suspended after restructuring plans, including an equity fundraise, failed.
The new owners – WoolOvers Group – have been urged to go back to basics.
The industry analyst told BusinessCloud said: “There’s a lot more competition out there but how do they win back Mr and Mrs Hotter? They have to rebuild their relationships with their customers and understand what it was that made them successful in the first place.”
- Ian Watson, Hotter Shoes and WoolOvers Group have all been approached for a comment.