Store closures higher than thought at Oddbins’ parent company
Nearly half of the retail stores operated by Oddbin’s parent company European Food Brokers Retail Ltd were unprofitable and have already been shut db has learnt, as reports circulate that the company may be rescued out of administration by its former owners.
As the news broke this morning that the administrators of UK wine merchant Oddbins is said to be in ‘advanced talks’ with Walsall-based European Food Broker Ltd’s (EFBL) owner Rajinder Chatha to acquire some of the businesses retail outlets, documents filed at companies house indicated that store closures were higher than previously thought, amounting to 45% of the entire retail estate.
Although administrators Duff & Phelps and EBF declined to comment on the rumours this morning, administration proposal documents filed at Companies House confirmed that 45 unprofitable stores were identified across the group, and these were closed by 19 March.
The closures affected more than 200 employees, with the highest proportion affecting staff at Wine Cellars Trading Limited (WCTL).
Currently 58 stores remaining trading, but more store closures may happen during the potential sale process, if the incoming purchaser is unable to agree terms going forward with the landlords.
As revealed by the drinks business last week, thirteen of the stores were Oddbins stores, with a further 32 stores coming under its sister company Wine Cellars Trading Limited, which trades under the Booze Buster, Simply Drinks, Oddies, and Shop2Go fascias and parent company European Food Brokers Ltd.
These outlets are primarily based in the North East and North West of England.
All of the companies outlets are leasehold, and the document revealed that leases on the estate were not paid in the last quarter of December 2018, resulting in several landlords and local authorities threatening legal action over the unpaid rates and rents.
The document reveals the extent of the companies financial difficulties, with losses most heavily accrued by Wine Cellars Trading Ltd.
It recorded non-preferential trade and expense creditors amounted to nearly £813,000, with nearly two thirds (£540,000) accrued by WCTL, it said.
The document also recorded a VAT liability of more than £465,000 to HMRC.
However, in the months to 22 March, gross sales across the group amounted to £2.355 million, with trading costs of £1.88 million.