This article is more than 1 year old

This article is more than 1 year old

Conviviality, the company behind high street off-licence chains Wine Rack and Bargain Booze, is on the brink of collapse, putting 2,600 jobs at risk and prompting warnings that pubs could run dry.

In a statement to the stock market, Conviviality said investors had refused its request for £125m of new money, which it needs to stave off bankruptcy after a string of shock profit warnings.



Directors are still seeking a buyer for all or part of the business, but Conviviality is facing the prospect of going into administration, which is likely to be managed by accountancy firm PricewaterhouseCoopers.

The trade body for the UK’s pubs, more than 20,000 of which are supplied by the company’s Matthew Clark distribution division, warned many could now face “short-term supply issues”.

“Despite a significant number of meetings with potential investors resulting in good levels of demand, and constructive discussions with a number of key customers and suppliers regarding the provision of support, there was ultimately insufficient demand to raise the full £125m,” the company said.



“The board wish to thank its customers, suppliers and employees for their continued support during this difficult period for the company.

“The company is in discussions with its lending banks and advisers regarding other possible options and is in receipt of a number of inbound enquiries regarding a potential sale of all or parts [of] the business.”

The company, which has annual sales of £1.6bn, said its shareholder were likely to receive “little-to-nil” value for their shares, which have been suspended on the junior AIM stock market since 14 March.

Despite reporting strong sales and profits in recent trading updates, Conviviality was plunged into turmoil after a string of profit warnings issued earlier this month that saw its shares suspended.

The company blamed the first profit warning on a erroneous calculation made by a member of its finance team and weakening profit margins. It later admitted it had not budgeted for a £30m tax bill.

Conviviality’s chief executive, Diana Hunter, stepped down after City analysts criticised the company’s financial controls and processes.

The firm is a major player in the UK drinks industry, supplying more than 700 off-licences and serving more than 23,000 pubs and restaurants including the JD Wetherspoon chain, via its Matthew Clark and Bibendum subsidiaries.

The British Beer & Pub Association said: “We are working with our members to assess the impact of the ongoing issues with Conviviality who, through Matthew Clark, are significant suppliers to the pub trade.

“Alternative suppliers will be sought in order to minimise the impact on the trade as far as possible, but inevitably a situation like this will likely cause short term supply issues for pubs.”</s>The embattled owner of off-licence chains Bargain Booze and Wine Rack was on the brink of collapse last night, putting at risk more than 2,600 jobs.

In a statement to the stock market, Conviviality revealed it had failed to secure £125m in emergency funding to save it, following a dramatic fall from grace just three weeks ago.

Suppliers are said to have deserted the business, which supplies a host of major pubs and restaurants, after it failed to come up with the money to pay an unexpected £30m tax bill due to HMRC today.

It had planned to use the cash to give the business some headroom as it reassessed its finances. Conviviality said it is now in talks with its lenders and is looking at selling either all or parts of the business.

But it admitted that should it be sold, shareholders are expected to lose everything.

The drinks retailer was plunged into financial chaos this month when it made an incorrect calculation in its financial forecasts and subsequently issued two profit warnings.

After its first profit warning on March 8 its share price plunged 66 per cent, wiping more than £300m off its value. It was forced to suspend trading of its shares and cancel its dividend.

Chief executive Diana Hunter left after more than five years at the helm.

It proved a marked contrast to Conviviality’s performance last year, when its share price surged as much as 51 per cent between the end of 2016 and October 2017.

Conviviality is understood to have accountants PwC waiting in the sidelines should it be forced into administration. The wholesaler has more than 700 convenience stores across the UK, which employ 2,600 staff.

A Conviviality spokesman said: ‘Despite a significant number of meetings with potential investors, resulting in good levels of demand, and constructive discussions with a number of key customers and suppliers regarding the provision of support, there was ultimately insufficient demand to raise the full £125m.

‘The board wish to thank its customers, suppliers and employees for their continued support during this difficult period for the company.’

Conviviality supplies 23,000 pubs and restaurants, with customers including JD Wetherspoon and Slug And Lettuce owner Stonegate Pub Company, with which it renewed long-term contracts earlier this year. In January it did a ten-year deal with pub owner Wadworth to supply wines to 200 managed sites and 139 independent outlets.

A spokesman for Wetherspoon said it had no plans at the moment to ditch Conviviality.

‘We’re one of, if not their biggest, customers. We have a contingency plan in place but so far there have been no issues with deliveries,’ he said. ‘They’ve been our supplier for 20 years and we’re not going anywhere else for the time being.’

Conviviality’s collapse would add more doom and gloom to the UK High Street, which has lost a number of big names, including Toys R Us and Maplin, leaving more than 5,000 jobs hanging in the balance.

Restaurants have faced a similar upheaval. Pizza and pasta chain Prezzo is closing 94 restaurants –around a third of its sites – celebrity chef Jamie Oliver’s Jamie’s Italian has shut 12 of 37 restaurants, while burger chain Byron is preparing to close 20 sites.

Conviviality said it will update the market in due course.</s>Conviviality, the company behind the off-licence chains Bargain Booze and Wine Rack, is to appoint administrators within a fortnight, putting 2,600 jobs at risk.



The impending administration has prompted warnings that pubs could run dry. More than 20,000 of Britain’s pubs are supplied by the company’s Matthew Clark division. The trade body, the British Beer & Pub Association, said many could now face “short-term supply issues”.

Conviviality said following discussions with its banks, the board had decided to to appoint administrators within 10 business days, unless circumstances change. The secured creditors can also appoint administrators without filing notice.

The news came a day after the company said investors had refused its request for a fresh cash injection of £125m, needed to stave off bankruptcy after a string of profit warnings. The first profit warning was related to Conviviality’s failure to budget for a £30m tax bill. Its chief executive, Diana Hunter, has stepped down.

Directors are still looking for a buyer for all or part of the business, and it will continue to trade.

The firm said in a stock market statement on Thursday: “The directors intend to allow the business to continue to trade and the company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.”

Conviviality supplies more than 700 off-licences and more than 23,000 pubs and restaurants including the JD Wetherspoon chain.

The firm’s shares remain suspended from the junior Aim market. Investors are likely to receive “little to nil” value for their shares, the company said.



Accountancy firm PricewaterhouseCoopers is expected to manage the administration.</s>Staff on Teesside are facing uncertainty after the owner of Bargain Booze - which is also a key supplier for Wetherspoons pubs - warned it will bring in the administrators within days.

Struggling drinks distributor Conviviality Plc said it is exploring a “number of” inquiries to offload the business and has filed a “notice of intention” to appoint administrators within 10 days “unless circumstances change”.

The group has Bargain Booze stores across Teesside in Middlesbrough , Stockton , Redcar , Hartlepool , and Darlington .

It is not yet known whether branches will close.

The group, which runs more than 700 retail stores trading as Bargain Booze, Select Convenience and Wine Rack, employs around 2,600 staff overall.

A spokesman said: “The directors intend to allow the business to continue to trade and the company continues to work alongside advisers, in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.”

It’s the latest in a string of big-name retailers to announce they are in trouble since the start of the year.

On Wednesday Grainger Games announced Teesside stores were among those at risk of closure, while earlier this month toy giant Toys R Us confirmed it was closing all stores within weeks.

Conviviality Plc is a major supplier to massive pub chain Wetherspoons and also supplies big UK festivals including Bestival, Isle of Wight Festival, and British Summer Time.</s>Thousands of jobs could be put at risk as the owner of Bargain Booze heads for administration, according to reports.

Conviviality, which owns the company, has failed to raise £123 million in a shares offer , Sky News states.

They say it is likely to lead to PricewaterhouseCoopers being appointed as administrator on Thursday.

The Bargain Booze chain has more than a dozen stores across North Wales although these are run on a franchise model.</s>Bargain Booze owner Conviviality has said it intends to appoint administrators within the next 10 business days "unless circumstances change", putting 2,500 jobs at risk.

The company's collapse would cap a nightmare quarter for the retail sector.

Since January, Toys R Us and Maplin have filed for administration, while fashion retailers such as New Look and Select have embarked on radical store closure programmes.

Piling on the misery has been the under-pressure casual dining sector, with Prezzo, Byron and Jamie's Italian all shutting restaurants and culling hundreds of jobs.

Conviviality said it plans to continue trading and will work alongside advisers as it explores a "number of inbound enquiries" over a possible sale of all or parts of the business.

The company said it will continue trading over that period in the hope of preserving "as much value as possible" for its stakeholders.

It will keep working alongside advisers and said it is exploring "a number of inbound enquiries regarding a potential sale of all or parts of the business".

"Following discussions with its lending banks, the board has resolved to file notice of intention to appoint administrators to the company," Conviviality said in a market announcement.

"Unless circumstances change, and in accordance with statutory requirements, the board intend to appoint administrators within 10 business days."

The chain first started in 1981 before growing to have more than 610 shops across the UK.

Over the past few weeks, the firm has seen its chief executive Dianna Hunter step down after issuing a string of profit warnings and revealing a £30 million tax bill.

Conviviality was forced to go cap in hand to investors to raise £125 million as a result, but it has been unable to convince them of its long-term future.

Ms Hunter, a former Waitrose director, had been chief executive since 2013 and led the group through its stock market flotation in the same year.

She also oversaw a number of acquisitions, including Wine Rack, Matthew Clark and Bibendum.

Non-executive chairman David Adams has taken her place until further notice.</s>More than 2,600 jobs are in jeopardy as Bargain Booze owner Conviviality prepares to call in administrators.

The group, which runs more than 700 retail stores trading as Bargain Booze, Select Convenience and Wine Rack, said that “unless circumstances change” it plans to appoint administrators within the next 10 business days.

It will continue trading over that period in the hope of preserving as much value as possible for its stakeholders and is also working alongside advisers as it explores “a number of inbound enquiries regarding a potential sale of all or parts of the business”.

Recent weeks have seen chief executive Dianna Hunter step down after issuing a string of profit warnings and revealing a £30m tax bill.

The firm was forced to try to tap up investors for £125m as a result, but it has been unable to convince them of its long-term future.

The group said that secured creditors of the business can appoint administrators without notice.

According to the company’s most recent annual report published last August, Conviviality employs more than 2,600 people and has more than 700 retail stores trading primarily as Bargain Booze, Select Convenience and Wine Rack, alongside 352 franchises.

Conviviality supplies more than 25,000 restaurants, hotels and bars - including Wetherspoon - more than 700 franchised retail outlets, and over 400 independent specialists. It also caters to festivals and events, as well as major supermarkets.

It has been reported that parts of the business could be close to a potential sale, but Conviviality has warned many of the pubs it supplies through its Matthew Clark distribution division could face short-term supply issues.

It is understood accountancy giant PwC is being lined up as administrator if a buyer isn’t found.

The company’s collapse would cap a nightmare quarter for the retail sector.

Since January, Toys R Us and Maplin have filed for administration, while fashion retailers such as New Look and Select have embarked on radical store closure programmes.

Piling on the misery has been the under-pressure casual dining sector, with Prezzo, Byron and Jamie’s Italian all shutting restaurants and slashing hundreds of jobs.</s>A cheap off-licence chain could go bust unless bosses raise £125million, they have said.

The owners of Bargain Booze – which has branches across Gloucestershire – announced in a stock exchange announcement that it was holding meetings with investors.

Parent company Conviviality hopes that the £125million will help it pay a £30million tax bill due at the end of March, fund overdue payments to creditors and repay a £30million loan.

Without a financial backer thousands of jobs could be put at risk as the owner of Bargain Booze heads for administration, according to the Birmingham Mail .

PricewaterhouseCoopers are expected to be appointed administrators on Thursday, a source told Sky News.

Two branches are in Cheltenham - at Bath Road and Tewkesbury Road - and one in Gloucester, in Bristol Road.

The news comes days after the firm confirmed that top boss Diana Hunter had left.

A number of the off-licence's suppliers are believed to have left the company, which also supplies booze to pubs, making it almost impossible for bosses to raise the funds needed.

Shares in the company, which also owns Wine Rack and the wholesaler Matthew Clark, were suspended at 101p last week after two profit warnings in the space of a week wiped more than 60% off its stock market value .

The company employs 2,600 people and supplies more than 700 off licences , and 23,000 pubs and restaurants .

If the company does file for administration, it will be the latest in a string of retailers who have struggled to keep their finances afloat.

Only in December it was reported Bargain Booze owner Conviviality had saved 1,100 jobs after buying more than 100 convenience stores in a £25million deal following the collapse of wholesaler Palmer & Harvey (P&H).

The alcohol wholesaler and distributor has secured a takeover of Central Convenience, which includes franchise rights, 127 convenience stores, 20 linked to petrol stations and 47 including Post Offices, and 18 franchisee-operated stores.

The group underpinned the deal by raising £30million on the London Stock Exchange by placing 8,000,000 new ordinary shares at 375p each.</s>Bargain Booze owner Conviviality plans to appoint administrators within the next 10 days “unless circumstances change”, putting 2,600 jobs at risk.

Bargain Booze owner Conviviality plans to appoint administrators within the next 10 days “unless circumstances change”, putting 2,600 jobs at risk.

The company said on Thursday that it will continue trading over that period in the hope of preserving “as much value as possible” for its stakeholders.

It will keep working alongside advisers and said it is exploring “a number of inbound inquiries regarding a potential sale of all or parts of the business”. The company is understood to be lining up PwC to lead the process.

The move puts thousands of jobs at risk, as Conviviality employs over 2,639 people and has more than 700 retail stores trading primarily as Bargain Booze, Select Convenience and Wine Rack. “Following discussions with its lending banks, the board has resolved to file notice of intention to appoint administrators to the company,” Conviviality said in a market announcement.

Toys R Us have filed for administration in a nightmare quarter for the retail sector (Yui Mok/PA) “Unless circumstances change, and in accordance with statutory requirements, the board intend to appoint administrators within 10 business days.” Shares have been suspended since Conviviality disclosed the discovery of its tax bill, which created what it called a “short-term funding requirement”.

It follows a torrid month for the firm, which saw its chief executive Dianna Hunter step down after issuing a string of profit warnings and revealing a £30 million tax bill. Conviviality was forced to go cap-in-hand to investors to raise £125 million as a result, but has been unable to convince them of its long-term future.

Ms Hunter, a former Waitrose director who had been chief executive since 2013, led the group through its stock market flotation in the same year, and oversaw a number of acquisitions, including Wine Rack, Matthew Clark and Bibendum.

“As we found with Palmer & Harvey’s rapid demise in late 2017, a default of this nature can have considerable short-term implications for supply chains, both those set not to be paid or those that seek to fill the void by the disruption to supplies that the current kerfuffle causes,” Shore Capital analysts Phil Carroll and Clive Black said.

Private equity firms could be ready to snap up the entire business with an eye on a few “selective disposals,” although the big four supermarkets and companies like CostCutter and Spar may also emerge as suitors, Mr Caroll and Mr Black explained. Its Matthew Clarke and Bibendum assets are positioned to attract big brewers, they added. The company’s collapse would cap a nightmare quarter for the retail sector.

Since January, Toys R Us and Maplin have filed for administration, while fashion retailers such as New Look and Select have embarked on radical store closure programmes. Piling on the misery has been the under-pressure casual dining sector, with Prezzo, Byron and Jamie’s Italian all shutting restaurants and culling hundreds of jobs.</s>More than 2,500 jobs are at risk as the owner of discount chain Bargain Booze as it looks set to go into administration.

It comes after the company, Conviviality, failed to raise £135m from an emergency cash call, according to Sky News.

PricewaterhouseCoopers are likely to be appointed as administrator from tomorrow onwards.

Conviviality shocked investors earlier this month after revealing a £30m tax bill and are now unable to raise sufficient funds to keep it afloat.

Bargain Booze, which has several stores across Devon - including one in Exeter, one in Exmouth, one in Paignton and five in Plymouth - is experiencing its lowest share price since it floated on the market.

Its shares have since been suspended after the tax bill was disclosed to the stock market, leaving it with a market value of just £185m.

The news comes just days after the departure of chief executive, Diana Hunter.

In addition to Bargain Booze, Conviviality also owns the Wine Rack chain and the drinks wholesaler Matthew Clark.

However, a number of suppliers are understood to have deserted the company, which had held the title as the UK’s biggest alcohol wholesaler last year.

As they supplied drinks to thousands of pubs, it undermined Investec's efforts to raise the new funding.

It supplies more than 700 off licences and 23,000 pubs and restaurants across the country, and employs more than 2,600 people.

Earlier this month, the company claimed that the margins in its wholesaler division had softened across January and February, and it was now expecting this weakness to continue for the remainder of the financial year.

A spokesman said: “A number of enhanced controls and disciplines have been introduced to address this and management believes that appropriate corrective actions are in place.”
Conviviality PLC, owner of Wine Rack and Bargain Booze, announces it has been refused investment to stave off bankruptcy and will likely enter administration.