Belfast Telegraph

Bargain Booze owner plans to appoint administrators within days

The company is understood to be lining up PwC to lead the process.

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.

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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.

Non-executive chairman David Adams has taken her place until further notice.

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

Analysts at Shore Capital have warned that there “will be ripples” from Conviviality’s collapse no matter the outcome.

“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.

Conviviality itself supplies 23,000 retailers, hotels, restaurants, pubs, clubs and bars.

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.

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