Hotter Shoes (United Kingdom) - Dec 2007

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01 December 2007

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Gresham has led a buyout of specialist shoe supplier Hotter Shoes. Gresham invested £21m of equity alongside senior debt provided by HSBC to complete the transaction which sees the managing director realise some value from the company and enables the broader management team to share in the company’s equity. Gresham has acquired a significant minority in the business following the deal, which it sourced off-market. Having built a relationship with the managing director some years ago, Gresham continued to track the business and negotiated a deal with the owner upon his decision to reduce his shareholding. Gresham was attracted to Hotter due to the fact that it is a direct marketing business with a loyal brand following in an attractive niche market – the affluent grey market. The business is expected to benefit from the demographics of an ageing population as well as increasing demand for stylish comfortable footwear. Gresham also believes the company has real scalability through its direct marketing channels via mail order catalogues and the internet.

Company

Established in 1959, Hotter sells its own-branded comfortable footwear to the grey market chiefly through mail order catalogues and the internet. It also has four retail outlets across the UK. Hotter recorded a turnover of £38m in 2007. The Skelmersdale, Lancashire-based company employs 300 staff.

People

Iain Wolstenholme, Andy Marsh and Andy Tupholme led the deal for Gresham and Andy Marsh and Ken Lawrence join Hotter’s board. Stuart Gray, Noel Jones and Glenn Wong arranged the debt on behalf of HSBC. Stewart Houlgrave is the managing director of Hotter and Peter Chappelow is chairman.

Advisers

Equity - Cobbetts , Nicola Frost, Sean Fitzgerald (Legal)Equity - Giles Insurance Brokers, Vicky Railton (Insurance Due Diligence)Equity - intermarketing, Ged Henry, Julie Stead-Connor (Other Due Diligence)Equity - KPMG, Richard Nash (Tax)Equity - KPMG, John Hughes, Katrina Magee, Kristan King (Financial Due Diligence)Equity - The Quinn Partnership, Mike Stiles, Paul Quinn (Other Due Diligence)Vendor - DLA Piper, James Kerrigan, Jonathan Watkins, Sally Benbow (Legal)Vendor - Ernst & Young, Colin McNeil, Mark Clephan, Mark Senior, Nicola Jones (Corporate Finance)