Hunter Boot
Hunter Boot went bankrupt while its brand sold for a reported £100 million
ALL BREAKDOWNSTHE BREAKDOWNFEATURE
8/27/20265 min read
Hunter Boot went bankrupt while its brand sold for a reported £100 million
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The setup
Three days before Hunter Boot Limited collapsed into administration, the most valuable thing about the company had already been sold to someone else.
Hunter Boot Limited entered administration on 5 June 2023 owing creditors £112.8 million
£97.9 million of that was secured debt, including £18.5 million owed to Wells Fargo and £7.5 million owed to investor Pall Mall Legacy. £16.9 million was owed to unsecured suppliers and landlords
On 2 June, three days earlier, the Hunter brand and its intellectual property had already been sold to Authentic Brands Group, a US company that buys and licenses fashion names, in a deal reported to be worth close to £100 million
The Hunter name kept selling boots within weeks, now made and sold by a different set of companies
Hunter's factory, its stock and its debt went into administration. Hunter's name and its 167 years of history sold for close to nine figures three days before that happened.
How did the British institution end up being worth two completely different numbers in the same week and who got to decide which parts kept the value.
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The playbook
1. A brand
In June 2005, Kate Moss walked through the mud at Glastonbury in a pair of black Hunter wellies, a tuxedo vest and denim shorts. The photographs went everywhere.
A boot that farmers and dog walkers wore to stay dry became something festival crowds wanted to be seen in and other celebrities followed. Before that moment Hunter was a struggling rubber boot maker associated with their father's dog walks. Afterwards, wearing one was a style statement and sales followed the image.
Hunter had already closed its own factory in Dumfries by 2008, moving production to contract manufacturers in China and elsewhere. The company stopped owning the means of making its own boots roughly fifteen years before it collapsed. What it kept was the name, the logo and two Royal Warrants. It licensed all three into bags, apparel and accessories.
By 2018 Hunter had its best year ever: £113.8 million in sales and £10.6 million in adjusted profit. The next year, sales fell to about £109 million, before covid had shut a single store. The business was spending cash faster than the profit number showed, on debt payments, discounts to clear stock and inventory bought months before anyone knew what the weather would do. A year and a half after its best year, Hunter needed a new majority owner.
The brand kept making money even while the company running it was short of cash. That ability is what made the brand separable later and it's exactly what a buyer would eventually pay for, without ever needing to own the factory that made the boots in the first place.
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Takeaway: what a company owns and what it's worth aren't the same thing. A business can hold something valuable, like a brand, while the company around it struggles to pay its bills. The smartest buyers spot that opportunity and buy the valuable part on its own.
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2. Finance a seasonal business
Hunter had to commit to production months before it knew what the weather would do. That model then absorbed a run of shocks. Falling demand from 2019. Covid store closures and cancelled festivals in 2020. Inflation and Brexit costs through 2021 and 2022. Then an unseasonably warm year that cut demand for rain boots when the business needed it most.
Pall Mall Legacy is a Goldman Sachs-backed investor. It took control of Hunter in a 2020 rescue deal, and was still owed £7.5 million when administrators took over. Owners who put in equity can afford to wait out a couple of bad years and hope things improve. Lenders can't. Hunter owed £97.9 million in secured debt and secured lenders have the legal right to demand their money back whenever they choose. That's a different kind of patience and it runs out much faster.
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Takeaway: debt doesn't kill a business on its own. It shrinks your margin for error, so a bad season costs more than it would with less debt. The less debt you carry, the more bad luck you can survive.
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3. Sell the name
Authentic Brands Group bought Hunter's intellectual property on 2 June 2023. Three days later, on 5 June, Hunter Boot Limited went into administration and was later renamed HBL Realisations Limited.
Authentic then split the operating work between three regional partners. Batra Group took the UK and continental Europe. Marc Fisher Footwear took the US. Baozun took Greater China and South East Asia, with a 51% stake in that part of the structure. Authentic kept the trademark and the licence income for itself. Hunter's Bicester Village store wasn't included in the deal and closed.
Press coverage called this a pre-pack, the standard insolvency route where a sale is agreed before an administrator is appointed, then completed once they take over.
Strictly, it wasn't one.
The IP sale closed three days before Hunter Boot Limited entered administration at all, while the company was still trading. The IP sale and the administration were two separate transactions, but the timing between them meant the valuable part of Hunter left the building before most of its suppliers knew the company was in trouble.
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Takeaway: Authentic wasn't rescuing a struggling company. It was buying the most lucrative part, the name, the logo, the heritage, without taking on the factory, the stock or the debt that came with them.
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One more thing
Weather, Brexit and covid all impacted the business. But a shock only becomes a solvency event if the business can’t absorb it and Hunter had already spent that contingency servicing debt.
Searchlight Capital had controlled Hunter since 2012, through the 2018 peak and into the decline that followed. Pall Mall Legacy took majority control in the 2020 rescue and was still the largest shareholder when the company folded. Both lost their equity. Pall Mall Legacy also held £7.5 million of the secured debt, which put it in line to recover some of that money even as its shares went to zero.
The suppliers and landlords owed £16.9 million kept the business running right up to the end. They were told they were unlikely to see the money, in the same week the brand they'd helped build reportedly sold for close to £100 million.
Hunter survived two world wars and a change of monarch. It didn't survive its own debt.
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The paper trail
S&P Global’s Hunter administration breakdown
5 minute read
The best concise guide to the debt stack, including Wells Fargo’s £18.5 million claim and Pall Mall Legacy’s £7.5 million exposure.
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Vogue: how wellies became festival fashion
3 minute read
The Kate Moss-at-Glastonbury story that turned Hunter from country footwear into a fashion symbol.
https://www.vogue.co.uk/fashion/gallery/glastonbury-wellington-boots-history
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Fashionista: Hunter’s festival takeover
6 minute read
A sharp look at how one muddy celebrity photograph helped create a global product icon.
https://fashionista.com/2018/06/hunter-boots-music-festival-shoes
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The Telegraph: “Hunter was a mess”
8 minute read
A candid earlier-turnaround account revealing that Hunter had struggled with bad stock, pricing and debt long before 2023.
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Trustpilot: the gap between brand and customer experience
10 minute browse
Anecdotal but revealing consumer sentiment on durability, cracking, returns and the premium-price promise.
https://www.trustpilot.com/review/hunterboots.com
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Reviewed: are Hunter boots worth the money?
5 minute read
A useful consumer-level test of whether the famous logo still justifies the premium price.
https://www.reviewed.com/lifestyle/features/are-hunter-boots-worth-it
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