Oddbins has now closed all of its stores
Beleaguered wine retailer Oddbins has now closed all of its stores a day after the UK government asked all non-essential retailers to shut their doors to prevent the spread of coronavirus.
The retailer, which fell into administration last year and was due to be sold at the end of March, wrote to all staff at 5:30pm on Tuesday evening (24 March) to inform them they would be furloughed and are eligible for the UK government’s emergency salary scheme.
The administrator, Duff & Phelps, released a statement this afternoon confirming the closure, adding that all staff will be furloughed and sent home “until further notice”.
Philip Duffy, joint administrator, told the drinks business: “All Oddbins stores in England and Scotland were closed at 7pm last night. The decision was taken by the administrators given the inability to continue trading given the current aoronavirus outbreak. This decision will also affect the Wine Cellar convenience stores, which is being implemented today.”
Oddbins took longer than some retailers, such as The Wine Society, to close its doors, making some members of staff uneasy over dealing directly with consumers in the midst of a global pandemic. Others, such as Majestic, also chose to stay open as it had not yet been made clear whether all shops selling alcohol count as “essential” stores.
The government actually extended its guidelines this morning so that off-licences and licensed premises selling alcohol can now stay open.
Staff at an Oddbins in Edinburgh told the drinks business they were being “forced” to come into work on Tuesday, despite the government asking people to work from home where possible and only leave the house for essentials.
That meant keeping stores open in the hopes shoppers would use the time they are permitted to shop for “essentials” to buy wine, and putting shop workers in direct contact with consumers. A spokesperson for Oddbins has so far declined to tell the drinks business what additional health and safety procedures the store recommended to staff to reduce the risk of catching the virus.
Staff were not given any direction over what will happen to their jobs, or whether or not they should bother coming in that morning, according to the employee, who asked to remain anonymous, they called head office for further guidance, who informed them it was “business as usual.”
“It’s terrible,” the employee said on 24 March. “of course we don’t want to be here, but we feel like we’ve been forced to do something we don’t want to do.”
Founded by Ahmed Pochee in 1963, Oddbins began as a delivery service for clubs and restaurants in London.
According to the UK’s latest measures announced on Monday evening, non-essential retail stores, hotels, and outdoor gyms must all close, and the police has powers to enforce this. However, exceptions include supermarkets and other food shops, including corner shops and newsagents.
A spokesperson confirmed Oddbins has now closed all stores, adding that the company’s senior staff spent most of yesterday deciding whether the company came under the government’s definition of an “essential” retailer.
“There was a lot of deliberation over whether Oddbins falls into one of those categories,” the spokesperson told db.
Another member of Oddbins’ staff told db he “understood” his colleagues’ frustration, but accepted “the situation is very unusual it is important to give the company time to understand.”
On the brink
The UK’s lockdown comes at a particularly bad time for the off-license chain, which fell into administration in January 2019 and was due to be sold at the end of this month as part of a rescue plan.
Oddbins went into administration in January 2019, blaming Brexit uncertainty and the deterioration of the high street, but it later became clear that its financial woes came in part from HRMC revoking the excise approvals of its parent company and chief supplier, European Food Brokers Limited.
This resulted in EFBL losing its bonded warehouse, putting a severe strain on its ability to bulk in bulk and secure competitive pricing from suppliers, severely affecting cashflow and its retail businesses.
A rescue plan from its former owners emerged in June 2019 and in September, an updated report for creditors published on Companies House confirmed terms of a sale of some the stores to an anonymous purchaser.
The administrators, Duff & Phelps, told db in February that due diligence and final discussions were underway and the proposed sales was “envisaged” to be completed by the end of last month, after incurring delays. However, in a statement filed on Companies House on 5 March, the administrators told the proposed buyer that should the deal not be completed “within the next month”, the company will be “wound down” (ie liquidated).
“Due to accruing costs, trading cannot continue indefinitely and as such [the joint administrators] have advised the proposed purchaser that should this deal not be completed within the next month.
“It was “not feasible” to continue trading the companies indefinitely and as such, they would be shut down in an orderly manner,” the update said.
The administrators added it would contact interested parties to sell individual shops “on a piecemeal basis.”
A member of Oddbins’ staff told db that, given the retailers precarious position, it was “understandable” that they wanted to stay open as long as possible, and suspected stores would re-open “as soon as they can.”
Commenting on the retailer’s position, Duffy told db: “It is unlikely in the circumstances that any further trading activity will be undertaken by the administrators but there may still be a number of stores that are acquired on the other side of this global pandemic.”