Oddbins closure likely unless sale completes within weeks

Beleaugered UK wine merchant Oddbins and its sister retailer, Wine Cellars Trading Limited (WCTL), is facing closure within months if the sale purchase currently on the table does not complete by the end of March, the joint-administrators have warned.

The high street wine specialist was put into administration in January 2019, blaming Brexit uncertainty and the deterioration of the high street for the situation, however it later became clear that its financial woes dated to HRMC revoking the excise approvals of its parent company and chief supplier, European Food Brokers Limited. This resulted in EFBL losing its  bonded warehouse, putting a severe strain on its ability to bulk in bulk and secure competitive pricing from suppliers, severely affecting cashflow and its retail businesses.

Reports first surfaced of a rescue plan by its former owners in June last year and in September, an updated report for creditors published on Companies House confirmed terms of a sale of some the stores to an anonymous purchaser.

It has not been confirmed how many of the 54 shops that are still open and trading will be included in the deal, nor their locations, although it has been confirmed that those not included in the purchase will be shut.

In a statement to the drinks business in early February a spokesman for the administrators said due diligence and final discussions were underway and the proposed sales was “envisaged” to be completed by the end of last month, after incurring delays.

However a progress statement filed at Companies House on Friday 5 March stated that the administrators had confirmed to the proposed buyer that should the deal not be completed “within the next month”, the company will be “wound down” (ie liquidated).

“Due to accruing costs, trading cannot continue indefinitely and as such [the joint administrators] have advised the proposed purchaser that should this deal not be completed within the next month, … it was “not feasible” to continue trading the companies indefinitely and as such, they would be shut down in an orderly manner,” the update said.

It added that having received interested in a number of the stores, it would contact the previously interested parties to sell shops “on a piecemeal basis”

The joint-administrators confirmed that they did not anticipate continuing trading the companies beyond the end of the next reporting period, by 29 August – despite having extended the administration period to January 2021 – with any sales, closures and the wind down of the company expected to be complete by then.

In total 14 Oddbins stores and 33 WCTL outlets, which trade under the Booze Buster, Simply Drinks, Oddies, and Shop2Go fascias, have already been shut, with around 200 job looses. The majority were deemed unprofitable and shut by the administrators in March 2019, but two further shops were closed as the result of landlord action last year.

A spokesman for the joint-administrators told the drinks business today they were unable to comment on details of the sale, but added that given the complicated nature of the process, sales could often take longer than initially anticipated.