Unbound Group, the parent company of Hotter, is drawing up plans for an emergency restructuring due to a slow sale process.
As a result, the group has asked advisors at Interpath to begin preparations for a restructuring plan, subject to court approval, allowing it to shed some of its liabilities, Sky News reported.
According to a source close to the talks have been described as “contingency planning”, although they acknowledged that such an outcome was becoming increasingly realistic. However, the identity of the parties with which it held talks was unclear.
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A spokesman for Unbound said it had “initiated a formal review of strategic options which included several possible outcomes, all of which are currently still under consideration”.
“No decision has yet been made but as and when any progress or a conclusion has been reached, a further announcement will be made.”
The move comes as Unbound revealed last month that a £10 million investment from Marwyn Investment Management had fallen through amid “worsening” trading conditions.
The group also recently put a pause on its ecommerce platform to focus on its core Hotter brand amid challenging trading results.
The move comes as the group saw shares drop by 41% in January this year, attributing the extended heatwave over summer, Royal Mail strikes and “broader economic conditions” to the decrease.
As a result, the group said expects its full-year revenues to be between £53 million and £54 million, giving a pre-tax loss of £4.25 million and £4.75 million.
