Earlier this month well known waterproof footwear and outdoor clothing brand, Hunter Boots, entered administration. The company's footwear is popular attire for festival-goers.
The administrators report records that the company has been struggling financially since late 2019 due to reduced demand, the Covid-19 pandemic and more recently, disruption in the supply chain. A shortage in shipping capacity leading to increased costs and missed deliveries appears to have played a big factor, as well as inflationary pressures driving up the cost of materials.
Alix Partners are appointed as administrators, having first been instructed by the company in March 2020 to assist with a refinancing solution. A further attempt was made to secure new capital in early 2023 without success.
A pre-pack sale of the company's intellectual property, assets and stock took place on 2 June 2023.
The administrators' proposal reports states that although a restructuring plan and scheme of arrangement were considered, there was insufficient time or cash to implement either of these restructuring solutions. As such, a pre-pack sale was considered to be the best outcome for creditors.
Hunter Boots was founded in 1856 and had over 120 employees. The company entered administration with debts of approx. £98 million owed to secured creditors, £140,747 owed to HMRC and approx. £16.8 million owed to unsecured creditors.
The majority of jobs appear to have been saved from the pre-pack sale with 110 of the employees transferred under TUPE to the new owners. The administration is also expected to result in majority of the secured creditors being paid, although no recoveries are expected for unsecured creditors.
This is a good example of how a pre-pack administration can increase the likelihood of jobs being saved where a company is insolvent and unable to repay its unsecured creditors, but the assets of the company are valued sufficiently highly to enable secured creditors to be paid.
If you would like any further information about pre-pack administrations, please contact Rachel Brown and Vernon Dennis in Howard Kennedy's Restructuring and Insolvency Team.
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