Oddbins is seeking a company voluntary arrangement with its creditors in an effort to save the business, Simon Baile, the UK wine retailer's MD, has confirmed today. Simon Baile said that a company voluntary arrangement (CVA) "is the preferred route"
Earlier this week, the retailer said it would close 39 of its 128 stores, heightening concerns about its future.
Poor Christmas trading and a court dispute with the group's previous owner appear to have brought things to crisis point. Baile said of the remaining 89 stores that would stay open are all making money. This yet again brings in to focus the fact that a multiple outlet retailer can have some poorly performing stores, tied into long term leases, that bring pressure on the group as a whole. For Oddbins the CVA is the preferred route as they will be able to terminate the leases on the underperforming stores. Of course, this is tough for landlords who may have offered concessions to big name retailers on the understanding that they were good for the rent even if that particular outlet did not make money.
Oddbins' situation is another example of tough times for the UK wine trade, which witnessed the collapse of Threshers owner First Quench Retailing at the end of 2009.
Struggling retailers should have a look at our retailer rescue page that shows how a CVA can save your business.