Turnaround funds eye Threshers business

By Simon Meads and Tom Freke

LONDON (Reuters) - Funds specialising in turning around troubled companies are among the favourites to buy the stores of off-licence chain Threshers from administrators, people familiar with the matter said on Friday.

Private equity firms, convenience store operators, rival off-licence chains and retailers are all poring over First Quench's stores, which include Threshers and other chains, as its administrator KPMG looks to secure a speedy sale, the people said.

R Capital, the owner of Little Chef, the roadside restaurant chain that called in Michelin-starred chef Heston Blumenthal to revitalise the menu at the chain, is looking at the business, as is private equity firm Rutland Partners, sources said.

Hilco and Endless, which also specialise in turning around distressed companies, are interested in all or parts of First Quench's network, sources said.

The firms declined to comment.

KPMG said on Thursday that it planned to close 373 loss-making First Quench stores, out of its 1,200 store network, at a cost of about 1,700 jobs.

The stores, which include the Wine Rack, Victoria Wine, Bottoms Up and The Local brands, have been losing around 20 million pounds a year, hit by competition from large retailers and small convenience stores.

"We have had a range of interested parties considering everything from one store through to a very large number of stores," said Ian Corfield, a joint administrator at KPMG.