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Oddbins to enter into CVA
Oddbins, the troubled UK off-licence chain, has confirmed that it is to enter into a Company Voluntary Arrangement.
As the drinks business predicted earlier today, the company feels that entering into a CVA will allow the best possible funds recovery for creditors while protecting the core business.
A statement from the company said: "Further to recent reports regarding Oddbins, it is worth reiterating that comments and speculation about the future of the company do not reflect the true facts concerning the core business, its future and the opportunity for Oddbins to remain as one of the leading high street drinks specialist retailers.
"The core Oddbins business is profitable. We have proven through 2009 and 2010 that Oddbins is a relevant brand in the market and, despite continued tough trading conditions, we have been able to grow like for like sales, increase transactions and bring more customers through the door; raising the average bottle price in 2010 to just under £8.00.
"The business, however, has been under continuous pressure as a result of legacy issues as well as challenging market conditions; which means it cannot continue in its current form. This is despite the positive consumer response to the brand and the Oddbins proposition. It was with deep regret that on Monday this week we announced the closure of 39 retail shops throughout the UK.
"Christmas trading conditions amplified the unprofitable performance of those shops. Thus we have taken this course of action in order to realise the potential of the core business. The Oddbins retail estate now stands at 89 shops (including 4 branches in Ireland and our online and wholesale businesses).
"We confirm that there is a dispute with Nicolas UK Ltd concerning the sale and purchase of the business back in 2008. The details of this dispute are in the High Court and therefore in the public domain. The legacy issues which the writ addresses have had an enormously negative effect on the company.
"Despite the resulting effect on cash, the core business remains very solid and in order to protect that core from the legacy issues and to maximise creditors’ recoveries generally, it is the directors’ view (on advice) that the company should enter a Company Voluntary Arrangement, details of which we will be sending out shortly."
Managing director Simon Baile added: "We have been encouraged by the support that we have received from our supplier partners in recent weeks, who wish to continue to work with us to bring their products to a receptive market.”
Further details on the CVA, as well as a breakdown of the stores that will be closed, is expected "in due course", according to a well-placed source.
Alan Lodge, 11.03.2011
We as a major supplier of Oddbins we were aware of this much ealier this week. However it is quite clear to me that when you read the case file regarding the dispute with Castel, it’s Castel which are still making life very difficult for Oddbins. In my opinion there treatment of Oddbins much the same way I see their wines, low grade, cheap and quite nasty!
I am a wine merchant in sheffield for 25 years and do not buy anything from Castel but their stocks of fine wines are one the best you can get in the world and to said that their wines are low grade, cheap and quite nasty is really silly and stupid!
They are far to be rubbish but just very wise with their business dealing! Sorry major supplier
for a company that trades on the expertise and unique habits of it’s staff, shame on Oddbins for throwing so many wonderful staff on gthe scrap without so much as notice, an apology, payments. Boycott those that treat people so cheap. unlike their wine.