Rising from the ashes
It’s been one hell of a year for the multiple specialists and the big story was unquestionably the demise of First Quench in October. But despite the troubles faced by everyone on the high street, there are plenty of operators who are determined there’s still money to be made.
First Quench’s fall has seen a new group of investors picking up parts of the portfolio from administrator KPMG. ?The latest acquisition came from Staffordshire-based SEP Properties, which bought the Victoria Wine, Threshers, Bottoms Up and The Local brand names alongside 23 stores. It’s planning on relaunching Threshers online and franchising the other brands. The Bottoms Up name will be used to rebrand SEP’s off-licence businesses and will? replicate Majestic’s approach.
R&M Swaine, parent company of Rhythm & Booze, saved 34 stores, expanding its geographic footprint from its South Yorkshire and Humberside base into Lincolnshire, North and West Yorkshire. The move took the group’s number of stores up to 72, with another four openings in the pipeline.
London wholesaler Venus Wine & Spirit, Wine Rack’s new owner, settled for 13 of the best-performing stores but wants to have a 50-strong estate eventually. It plans on stocking unbranded and unusual wines that customers can’t find anywhere else in the UK, alongside mainstream, well-known brands and fine wines.
Chairman Laki Christoforou told OLN he had initially been looking to buy 100 stores from KPMG but “the risk was too big”.
Similarly, Hampshire-based Wickham Vineyard revealed it initially wanted to scoop up 90 stores in the First Quench estate before settling on a much more manageable 14. General manager
Wilhelm Mead said the shops have provisionally been named Wineshack and they will all stock Wickham wines. The producer is understandably cautious and is planning on “seeing how things go” before committing to buying any more sites.
A further eight shops have been sold to Spar, five to Southern Co-op and one to Scotmid Co-op.
Prospective buyers??The sense of renewal in the multiple specialist market is not confined to new players; it’s also in evidence from the established? retailers.
Oddbins managing director Simon Baile says he is looking to buy five more stores this year, which would take the number of shops from 128 to 133.
“We have a number of sites in mind, there are a lot of empty shops around following First Quench’s demise and that of other retailers,” he says. “We’re looking to buy at least five this year – any more would be great but that’s a good place to start.
“We’re still looking to expand and every month we take a big leap forward.”?Baile says a major focus for this year will be the Champagne range. “We’re driving towards small growers and moving away from the stuff that’s heavily discounted everywhere – as a consumer I find it very boring.”?He admits its range from the south of France and South Africa are “weak” and says the spirits range will be? examined. “We have roughly 1,200 lines now, counting quite a few parcels we got in for Christmas. We need to tighten that and take some stuff out.
“Oddbins isn’t yet the force it was 20 years ago but we’re on the road back from a very dark place?,” he adds.
Matthew Hughes, joint managing director of Bargain Booze, says like-for-like sales were up 6.7% year on year on average for the two weeks of Christmas and new year. He says his strategy for 2010 will be “more of the same”.
“The company will open more stores and continue with successful growth of the convenience business alongside the off-licence business,” he adds. The total estate is 610 stores and he is looking to add 50-plus more in the next year.
“We’ll continue to concentrate on the areas we’re already trading in. A few franchisees might pick up former First Quench sites but only if decent ones are available – there’s a reason why they weren’t successful. It wasn’t just the business proposition, it was location too in some cases.”?Chief executive Steve Lewis was quick to rule Majestic out of the running as a prospective buyer? but it’s still looking to expand. “The Majestic formula doesn’t belong on the high street. We need at least 3,000sq ft so we have enough stock for events and restaurants. Apart from a few stores in London, we need to have at least six parking spaces. I have no interest in taking Majestic on to the high street?,” he says.
Majestic now has 152 stores after closing its shop in Vinopolis, but Lewis remains optimistic about growing the estate to 250 locations. “We look to open eight to 10 new stores a year. Majestic has virtually no debt and I intend to keep it that way?.”??Majestic saw like-for-like sales jump 5.4% in the six months to September 28, and Christmas sales were up 11.7%. Lewis says the results were “even better than expected”.
“We had our most experienced store teams working over Christmas and we really delivered on our proposition of customer service.”? He says the reduction of the the minimum purchase to six bottles in September had resul?ted in an increase in transactions and the number of customers trying Majestic for the first time.
“Significantly more people are coming to Majestic stores and as a retailer that’s what it is all about.”