Bargain Booze linked with move for rival
Costcutter owner Bibby Line Group could be ready to jettison its loss-making Rhythm & Booze off- licence chain to focus on its core convenience business.
The company bought R&B in a pre-pack administration just two years ago but the formation of last year’s Buyco joint venture with Mace retailer and wholesaler Palmer & Harvey has left the off-licence group down the pecking order.
Trade rumours suggest that Bargain Booze is lining up a deal to buy a package of the brand name and 20 stores, which would leave the remainder of the chain’s future in doubt.
Bibby bought all 68 R&B stores in the £3.8 million 2012 deal. It initially anounced ambitious growth plans including a national franchise scheme, but had closed 10 stores by the end of that year and made a pre-tax loss in that time of £1.1 million.
Nick Ivel, the chief executive who fronted the deal and said “there is a big market out there” for off-licences, has since left to be replaced by Darcy Willson-Rymer, former boss of Clintons card shops.
One source close to the company said: “Would I be surprised if it wants to sell? No. Would it be good acquisition for Bargain Booze? Yes. Would I be surprised if Bargain Booze was interested in a deal? No.
“You have to question the value of having a relatively small off-licence chain when you’re such a big player in the convenience market already.”
If a deal did go through it would be a second acquisition since Bargain Booze was floated as Conviviality Retail in July last year. It bought the Wine Rack chain – once part of Thresher – from Venus Wine & Spirits Merchants in September.
Market analyst Edison described “the successful integration of the Wine Rack acquisition” as a strategic highlight for the group since going public.
It said this, and the appointment of Susan McCraith MW as wine consultant, has introduced 23 new wine suppliers to the business, added 275 new lines and boosted sales of higher-margin sparkling wine and Champagne by 20%.
It added the Wine Rack deal “gives it further confidence to seek out strategic bolt-on acquisitions”.
A package of brand names and selected stores would provide Bargain Booze with the opportunity to take rival brand names off the high street and expand its geographical reach in R&B’s heartland on the eastern side of northern England.
Both Conviviality and Costcutter declined to comment on the speculation.