Wine Cellar closes down

More than 300 jobs are set to go after the collapse of retail group Wine Cellar, which operated 170 off-licence and convenience stores across England under the names Booze Buster, Simply Drinks and Simply Food & Drinks.

EFB Retail bought 109 stores off Wine Cellar, including its stock, on 1 October following the appointment of Deloitte as administrators to Wine Cellar on the previous day.

The purchase will secure 640 jobs at the stores, which are largely based in England’s north west and north east. The deal will also save approximately 60 members of staff from Wine Cellar’s headquarters.

Following an extensive search to look for a buyer for the remaining stores, last week Deloitte confirmed the unsold stores would shut down resulting in a loss of over 300 jobs.

Bill Dawson, partner in reorganisation services practice at Deloitte said: “The administrators are not in a position to continue trading the remaining 61 stores which have not been sold. These stores have been closed and unfortunately around 320 employees have been made redundant. We will be working closely with the Redundancy Payments Office to provide support for these staff.

“The company has undertaken an extensive search to find an investor or buyer. It has become necessary to sell the business via an administration, due to its financial position.”

EFB Retails is a subsidiary of drinks wholesaler European Food Brokers, which is owned by Rajinder Chatha, who also owns the Whittalls Wines chain and is worth an estimated £50 million.

Retail chiefs fear that the collapse of Wine Cellar is symptomatic of the lack of understanding within the government of the extent to which the off-trade is coming under pressure from rules and regulation.

Shane Brennan, public affairs director at the Association of Convenience Stores, told the drinks business: "The government does not really understand what many retailers are trying to battle against and the perception of retailing does not match the reality.

"There is an understanding that this is a tough time for all businesses, but the political pressures to be tough on alcohol has lead to a lack of genuine insight and understanding of the problems facing the off-licence trade."

However, Brennan believes that there are still opportunities out there for retailers to thrive through the downturn.

"Retailers are not helpless," he said. "It’s always very sad when stores close, but through diversifying the offerings and focusing on the specific needs of their customers, there are opportunities for them to survive."

Jane Parkinson and Alan Lodge, 05.10.2009