March 29, 2018 / 6:26 AM / 2 years ago

Bargain Booze firm Conviviality close to collapse

LONDON (Reuters) - Drinks wholesaler Conviviality CVRC.L said on Thursday it was likely to collapse into administration within two weeks, putting around 2,600 jobs at risk.

Britain’s largest franchised off-licence and convenience chain operates more than 700 stores under the Bargain Booze and Wine Rack brands. Serving over 10,000 customers, it also supplies pubs, restaurants, hotels and clubs including JD Wetherspoons (JDW.L).

The group hit trouble earlier this month when it failed to allow for a 30 million pounds tax bill in its cash flow forecast, and has since failed to raise 125 million pounds in an emergency cash call.

“Unless circumstances change, and in accordance with statutory requirements, the board intend to appoint administrators within 10 business days,” it said.

Conviviality said it would continue to trade and was exploring several enquiries regarding a potential sale of all or parts of the business.

It said on Wednesday that shareholders in the company would receive little-to-nil value.

Conviviality’s shares were suspended on March 14 at 101.2 pence, which at the time valued the firm at 185 million pounds. In November the stock was trading at 432 pence.

While UK consumers’ spending has been squeezed by inflation and subdued wages growth a lot of Conviviality’s problems were self inflicted. Its chief executive Diana Hunter quit last week.

Several British retailers have struggled to cope with the tough trading conditions, with job cuts and store closures darkening the mood on the high street.

Toys R Us UK and electricals group Maplin have collapsed into administration, while fashion retailer New Look and floor coverings firm Carpetright are restructuring and closing stores.

Last week British restaurant chain Prezzo said it would close nearly 100 branches.

Reporting by James Davey; editing by Kate Holton

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