Oddbins administrators remain hopeful of imminent sale
Administrators remain hopeful that they can sell a significant number of stores from the former EFB Retail empire to their preferred bidder within the next month.
The owner of Oddbins, Whittalls Wines Merchants and Wine Cellar Trading fell into administration in January 2019. It blamed Brexit, economic uncertainty and poor high street sales over the Christmas period.
Administrators Duff & Phelps have been trading the four businesses – EFB Retail Ltd., Whittalls Wine Merchants 1 Ltd., Whittalls Wine Merchants 1 Ltd., and Wine Cellar Trading Ltd. – under administration since then.
They identified 45 unprofitable stores to close via an orderly wind down. Since then a further five have been closed down, leaving just 53 trading. The total staff made redundant now stands at 200.
The administrators, Philip Duffy and Matthew Ingram, have provided an update on the process. They revealed they still hope to complete the sale of a number of stores within the next, although it us unknown which stores will be included in the transaction. Any stores not part of the transaction will be closed. The group has four vehicles, which will also be sold.
“It is not feasible to continue trading the companies in administration indefinitely,” said Duffy. “Should a sale not be completed it is anticipated that an orderly wind down of the companies will be initiated.”
The joint administrators have received a number of offers for stores on a piecemeal basis. However, the administrators are holding out for a proposed purchaser to take a larger chunk of the stores in the next month or so. If that falls through, they will approach interested parties about stores in order to maximise the return to creditors.
The administration period has been extended until January 2021, but the administrators do not expect to trade the companies beyond that reporting period.
Based on the current information available, the joint administrators currently anticipate that there will be sufficient asset realisations to enable a distribution to be made to the secured creditors of the companies. However, at this time the “quantum of such distribution” is uncertain.
The companies held no freehold property when they plunged into administration. They operated from 101 leasehold sites across the UK, along with head offices in London and Walsall.
Creditors were owed £551,000 at the time of administration. A total of £56,804 has been collected so far.
In the year since the companies went into administration, gross sales stand at £24.9 million (January 30, 2019, to January 29, 2020). Total costs were almost £19.6 million, including wages, salaries, rents and supplier costs. There are accrued but unpaid liabilities, and the administrators do not expect to see any significant trading surplus generated.
The joint administrators were contacted by HMRC regarding a significant bad debt relief claim that had been submitted by one of the group’s main suppliers. This investigation remains ongoing, and the administrators are assisting HMRC.
When the companies went into administration, Rajinder Singh Chatha was owed a total of £5.6 million. Based on current estimates, it is unclear whether he will recover the full amount he is owed. It will be dependent on the outcome of the sale process, the amount that can be raised through asset sales, the level of preferential creditor claims and the costs of the administrators.