Questions remain after EFB Oddbins deal
Whittalls Wine Merchants, a subsidiary of EFB Retail, has reached an agreement to purchase 37 Oddbins stores, saving more than 200 jobs in the process at the fallen off-licence chain.
EFB has not yet confirmed to the drinks business whether Oddbins brand name will be retained at the acquired stores, but the deal adds to EFB’s purchase of the Wine Cellar estate in November 2009.
It is understood the majority of the stores are located in Scotland and London. Though no confirmation has come from either the administrator or EFB regarding the cost of the deal, a figure in the region of £4 million has been widely mooted.
Raj Chatha, owner of EFB Group, said: “This represents a new dawn for these Oddbins stores, and with the well reported financial shackles removed, it will allow for a consistent supply of stock and investment at store level for the benefit of all, most importantly its loyal staff and consumer base.
“Our focus over the coming weeks and months will be to replenish the stores with an exciting range at competitive prices. I am also delighted with the number of jobs we have managed to save.”
Chatha has placed the continued use of the Oddbins brand name "under review".
Lee Manning, joint administrator and partner at Deloitte, added: “We are delighted to be able to announce this sale and confirm the securing of 200 jobs. We are currently engaged in a range of discussions regarding the sale of the remaining 48 open stores and are confident of an imminent deal.”
Oddbins was placed into administration on 4 April 2011. The retailer, with 89 stores across the UK and Ireland, employed around 400 people.
It had planned to restructure its debts through a company voluntary agreement (CVA). However, the company did not receive the support of its biggest creditor, HMRC, and as a result the business was placed into administration earlier this month.
Former owner Simon Baile last week failed in a bid to buy the whole Oddbins estate, but is now understood to be in negotiations to buy a smaller number of outlets.
Before creditors can start to cheer the apparent "rescue" of Oddbins, a number of questions will need answering by the adminstrators at Deloitte.
Firstly they will want to know whether Deloitte is persuing Oddbins legal suit against Castel, which Baile previously partly blamed for the demise of the business in the first place.
They will also want to know what has happened to the £17.5m debt owed to Oddbins by Ex-Cellars Investments, which is jointly controlled by Baile and former Oddbins director Henry Young, and any action Deloitte has planned in this respect.
It is also unclear whether the administrator has set a deadline for the disposal of other parts of the business and the point at which administration fees will outweigh any likely financial benefit for creditors.
Deloitte has not yet responded to the drinks business over these issues.
Alan Lodge, 26.04.2011