FQR suppliers await their fate

The administrator of off-licence operator First Quench Retail has pledged to do its utmost to ensure suppliers receive all due payments as they seek a buyer for the failed company.

Business advisory firm KPMG said that it will maintain a dialogue with creditors, but stopped short of offering them a 100% guarantee that they will receive all their money.

A spokesperson for KPMG told the drinks business: “We don’t have specific figures on who is owed what at this stage but suppliers will fall into the unsecured creditor category for money owed up to appointment.

“Clearly to operate the business as a going concern, we will need to work closely with suppliers to carry on, as far as possible, normal trading.”

Trade figures have reacted to the news of FQR’s collapse with collective concern, with many fearing the knock-on effects will be felt right across the spectrum of the industry.

James Craig-Wood, communications director at United Wineries, believes the trouble may have stemmed from the business philosophy of Vision Capital, the private equity firm that owns FQR.

“It is well documented that venture capitalists and the wine business don’t mix well, as the former demand equity returns that are unrealistic,” he said.

Craig-Wood added that the collapse of FQR was not down to any one particular fault with the running of the company, rather it was the result of a host of circumstances which conspired against it.

“I think there are several reasons that have come together to create a perfect storm,” he said. “The main one being the competition it faced from supermarkets with their aggressive promotional activities, combining with the recession, the high cost of high street leaseholds, increased distribution costs, large stock holdings and the withdrawal of trade credit insurance.”

FQR, which operates the Threshers, The Local, Wine Rack, Bottoms Up, Victoria Wine and Haddows chains, was placed into administration last Thursday evening (29 October) with the immediate loss of 81 jobs at its head office the following morning.

KPMG has said there will be no further redundancies among store staff at FQR’s 1,202 outlets in the UK until it has assessed the viability of each individual outlet.

Fifty KPMG staff spent the weekend evaluating the group’s stores one-by-one and the administrator says it is “confident” that it will find buyers for a “big number” of stores, but it is understood Vision Capital has no interest in rescuing any of the business out of administration.

Alan Lodge, 02.11.2009