Losses mount at Bestway Retail Ltd despite increased sales
Losses at the UK’s Bestway Retail Limited, which operates the former Conviviality’s retail brands, rose during 2020 to £8.2m, results filed at Companies House reveal, despite an increase in revenues.
Revenues at the group, which operates as a wholesaler and retailer under the Bargain Booze, Wine Rack and Central Convince store brands rose to £388.5 m in the year to 30n June 2020, up from £379.4m the previous year.
However losses mounted to £8.2m, up from £6.2million the previous year, which the directors attributed to a longer than expected “stabilisation period” of the business. Net liability was recorded at £15.2milion.
Gross profit margin at the groups also fell slightly to 12.8% compared, down from 13.5% the previous year.
Bestway bought the former Conviviality retail businesses for £7.25 million in April 2018 and the support for its franchise shops and company-owned stores were transfered to the Bestway Retail Team in July 2019, having been previously overseen by the Wholesale team.
The majority of the stores are held on a franchise basis, and the group said it had conducted a review of its stores, closign six of its unprofitable stores in February 2020, leaving 171 corporate stores.
The company said that the business had now been stabilised and working capital had improved as a result of improved stock and debtor management following acquisitions last year and it had concentrated on boosting franchisee loyalty,
The directors said they hoped losses and KPS would improve in 2021, and expect the Group to return to profit.
During the pandemic, the company reduced its cost base by furloughing staff and taking up the business rate holidays, tax and VAT payment deferrals. It also paid a bonus to front-line employees, noting the hard work they had done in a challenging environment, with “additional pressures due to both increased customer demand and higher than normal levels of staff absense”.
The Bestway Group is the largest independent wholesale group in the UK and its wholesale division bought around 800 stores from Conviviality for £7.5 million in April 2019, saying the would add around £500 million to its annual revenue. These were later moved under the auspices of Bestway Retail.
Last week, Bestway’s wholesale division reported revenue rises of 3%.