Unbound Group today reports a 10% rise in first-half sales, but a pre-tax loss after costs related to the launch of its new Unbound trading platform, which targets shoppers aged 55 and over.
Unbound Group is focusing on the over-55 customer as it expands beyond its core Hotter Shoes brand. The business launched a new Unbound platform – unboundgroup.co.uk – at the end of July through which third-party brands can sell to its target market, while also developing a new U_Space community, to understand their lifestyle, attitudes and behaviour. The platform launched with seven brands that deliver orders through the platform on a drop ship basis. It is currently adding more to the site. Initially footwear and clothing brands – including Birkenstock, Skechers, Rohan and Lakeland Leather – are selling through the platform, but Unbound will expand into wellness in the first quarter of its next financial year.
The group says that the launch of its new platform will mean it can diversify in the medium-term as it targets over-55s with a wider range of products. Its customer database currently includes the details of about 30% of the female 55+ UK population – about 4.6m people.
Unbound Group chief executive Ian Watson says in today’s half-year statement that its target customers are focused on health and wellbeing. It serves, he says, an increasingly wealthy demographic that is the fastest growing part of the UK population. “The majority of ecommerce businesses tend to be focused on younger demographics, leaving, in the opinion of the directors, the group’s target demographic materially underserved online despite online shopping participation and general digital literacy increasing the most amongst the over-65 age group,” says Watson.
“The directors believe that this offers an opportunity for sustainable incremental growth beyond that already being targeted by the group’s Hotter footwear brand.”
Half-year figures
The update came as Unbound today reports half-year revenues of £27.6m. That’s 10.4% up on the same time last year. Sales of its Hotter Shoes brand grew across channels in the six months to July 31, mostly reflecting higher average selling prices and technological improvements in the range. Those higher prices offset the effect of inflation on its operations. Most of Hotter Shoes sales are made online, where sales grew by 2.4% to £20.7m. In-store retail sales grew by 71.6% – or 17% once last year’s Covid-19 store closures were excluded – to £5.05m. Wholesale grew by 0.5% to £1.9m.
But the costs of launching the Unbound platform resulted in a top line pre-tax loss of £0.3m, and, after one-off costs of £1.15m, a bottom line pre-tax loss of £2.1m. No revenues for the Unbound platform were reported in today’s figures since it launched at the end of the first half. At the end of the first half it had net cash of £2.7m and net debt of £8.4m. However an equity fundraise in August raised £3.1m net of expenses.
Watson adds: “The broader revenue base we have created with the launch of the Unbound platform marks an important strategic shift for the group. However, we remain mindful of the growing pressures on consumer spend. Consequently, we continue to review and adapt to the changing market conditions, maintaining our specialist focus on our core customer demographic of financially resilient 55+ consumers.”
Unbound says in recent weeks it is has seen the trading environment become “more challenging and harder to predict”. Unbound says that its UK factory together with a stronger supply chain will mean it can respond quickly to changes in consumer behaviour – helping it to perform in an “unpredictable environment”. Availability of Hotter stock was at its highest-ever levels as it launched its autumn/winter season.
Hotter is ranked Top100 in RXUK Top500 research.
