Oddbins goes into administration
Struggling wine retailer becomes victim of triple threat of credit crunch, supermarkets and tax collectors Oddbins looks likely to become the retail sector’s latest victim after the struggling wine retailer caved in to the combined forces of the credit crunch, supermarkets and tax collectors, and went into administration. All 400 jobs at the 128-strong chain are at risk, although the company said it remained optimistic that some could be saved. Simon Baile, the managing director who took control of the firm in 2008, said: “We very much regret the need to make so many staff redundant and we are working diligently to find a buyer for the majority of the business so that as many jobs as possible may be saved.” Oddbins, which started life in 1963 and was once celebrated for its expertise and eccentric staff, was forced to give up the fight after HM Revenue & Customs – a key creditor, to which the chain owes about £8m in taxes and duties – opposed a rescue plan which the firm believed was essential to its survival. It is now likely to be wound up and sold off in chunks, with the cash raised going to owners and creditors. Despite its feted past, Oddbins was loss-making for most of this century, squeezed by the might of the supermarkets which now account for 70% of UK wine sales and can deliver sancerres and shirazes to the door along with the weekly groceries. Former competitors such as Unwins, Wine Cellar and First Quench Retailing – owner of Threshers, Wine Rack and The Local – have already gone. Only Majestic Wine has thrived, carving out a successful upmarket niche that occupies similar ground to Oddbins in its heyday. Following a difficult Christmas and with the retail environment showing signs of getting even tougher, Oddbins was unable to secure sufficient backing for a rescue plan that would have seen landlords agree to a 30% cut in rents, and payment in monthly rather than quarterly instalments. The deal equated to a payment to landlords of about 21p in the pound. An Oddbins spokesman said Baile reported that “a number of potential investors have come forward to buy the business, or parts of it, as a going concern and although nothing is certain he remains optimistic”. The news came amid another grim day for the sector, which has seen shoppers retrench in the face of rising prices, higher VAT and the uncertainty created by government cuts. Mothercare and Laura Ashley both warned that trading had deteriorated considerably in recent weeks while Easy Living Furniture, a 20-strong chain in the south of England, also went into administration. H&M, the Swedish fashion chain with a large presence in the UK, announced a surprise 30% dip in its profits in the three months to February, as it suffered from the widespread decline in consumer spending. The prospect of any recovery on the high street was further dented as the Bank of England reported that the number of people defaulting on their mortgages rose unexpectedly in the first three months of the year. Howard Archer, chief UK and European economist at IHS Global Insight, said: “Consumer confidence remains extremely weak, thereby maintaining concern that consumers will be very cautious in their spending over the coming months in the face of serious headwinds. “Consumers’ purchasing power is currently being increasingly squeezed by high and rising inflation in tandem with ongoing muted wage growth overall. In addition, the weak housing market has adverse repercussions for consumer spending,” he added. The developments continued the bad news in what has been one of the gloomiest weeks for retail announcements in years, causing the spotlight to shine even brighter on the government’s public spending cuts. It emerged on Tuesday that Britons’ spending power fell last year for the first time in three decades. So-called real household disposable income – the total income of Britain’s working and unemployed populations after taxes and adjusted for inflation – dropped by 0.8% in 2010, according to the Office for National Statistics. On Wednesday, the boss of electricals group Dixons said that the government’s cuts were having a “chilling effect” on consumers as the group announced that like-for-like sales at its Currys and PC World stores in Britain and Ireland tumbled by 11% in the last 11 weeks. Signet announced weak trading at its H Samuel and Ernest Jones stores in the UK. DFS, the sofa retailer, said growth had slowed and even Domino’s Pizza, the stock market darling, was forced to admit that it was being dragged down by its Irish stores where like-for-like sales dropped more than 10% in the first quarter. Retail industry Dixons Retail Mothercare Laura Ashley Wine Tom Bawden Fiona Beckett guardian.co.uk
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Oddbins goes into administration
Struggling wine retailer becomes victim of triple threat of credit crunch, supermarkets and tax collectors Oddbins looks likely to become the retail sector’s latest victim after the struggling wine retailer caved in to the combined forces of the credit crunch, supermarkets and tax collectors, and went into administration. All 400 jobs at the 128-strong chain are at risk, although the company said it remained optimistic that some could be saved. Simon Baile, the managing director who took control of the firm in 2008, said: “We very much regret the need to make so many staff redundant and we are working diligently to find a buyer for the majority of the business so that as many jobs as possible may be saved.” Oddbins, which started life in 1963 and was once celebrated for its expertise and eccentric staff, was forced to give up the fight after HM Revenue & Customs – a key creditor, to which the chain owes about £8m in taxes and duties – opposed a rescue plan which the firm believed was essential to its survival. It is now likely to be wound up and sold off in chunks, with the cash raised going to owners and creditors. Despite its feted past, Oddbins was loss-making for most of this century, squeezed by the might of the supermarkets which now account for 70% of UK wine sales and can deliver sancerres and shirazes to the door along with the weekly groceries. Former competitors such as Unwins, Wine Cellar and First Quench Retailing – owner of Threshers, Wine Rack and The Local – have already gone. Only Majestic Wine has thrived, carving out a successful upmarket niche that occupies similar ground to Oddbins in its heyday. Following a difficult Christmas and with the retail environment showing signs of getting even tougher, Oddbins was unable to secure sufficient backing for a rescue plan that would have seen landlords agree to a 30% cut in rents, and payment in monthly rather than quarterly instalments. The deal equated to a payment to landlords of about 21p in the pound. An Oddbins spokesman said Baile reported that “a number of potential investors have come forward to buy the business, or parts of it, as a going concern and although nothing is certain he remains optimistic”. The news came amid another grim day for the sector, which has seen shoppers retrench in the face of rising prices, higher VAT and the uncertainty created by government cuts. Mothercare and Laura Ashley both warned that trading had deteriorated considerably in recent weeks while Easy Living Furniture, a 20-strong chain in the south of England, also went into administration. H&M, the Swedish fashion chain with a large presence in the UK, announced a surprise 30% dip in its profits in the three months to February, as it suffered from the widespread decline in consumer spending. The prospect of any recovery on the high street was further dented as the Bank of England reported that the number of people defaulting on their mortgages rose unexpectedly in the first three months of the year. Howard Archer, chief UK and European economist at IHS Global Insight, said: “Consumer confidence remains extremely weak, thereby maintaining concern that consumers will be very cautious in their spending over the coming months in the face of serious headwinds. “Consumers’ purchasing power is currently being increasingly squeezed by high and rising inflation in tandem with ongoing muted wage growth overall. In addition, the weak housing market has adverse repercussions for consumer spending,” he added. The developments continued the bad news in what has been one of the gloomiest weeks for retail announcements in years, causing the spotlight to shine even brighter on the government’s public spending cuts. It emerged on Tuesday that Britons’ spending power fell last year for the first time in three decades. So-called real household disposable income – the total income of Britain’s working and unemployed populations after taxes and adjusted for inflation – dropped by 0.8% in 2010, according to the Office for National Statistics. On Wednesday, the boss of electricals group Dixons said that the government’s cuts were having a “chilling effect” on consumers as the group announced that like-for-like sales at its Currys and PC World stores in Britain and Ireland tumbled by 11% in the last 11 weeks. Signet announced weak trading at its H Samuel and Ernest Jones stores in the UK. DFS, the sofa retailer, said growth had slowed and even Domino’s Pizza, the stock market darling, was forced to admit that it was being dragged down by its Irish stores where like-for-like sales dropped more than 10% in the first quarter. Retail industry Dixons Retail Mothercare Laura Ashley Wine Tom Bawden Fiona Beckett guardian.co.uk
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Oddbins goes into administration
Struggling wine retailer becomes victim of triple threat of credit crunch, supermarkets and tax collectors Oddbins looks likely to become the retail sector’s latest victim after the struggling wine retailer caved in to the combined forces of the credit crunch, supermarkets and tax collectors, and went into administration. All 400 jobs at the 128-strong chain are at risk, although the company said it remained optimistic that some could be saved. Simon Baile, the managing director who took control of the firm in 2008, said: “We very much regret the need to make so many staff redundant and we are working diligently to find a buyer for the majority of the business so that as many jobs as possible may be saved.” Oddbins, which started life in 1963 and was once celebrated for its expertise and eccentric staff, was forced to give up the fight after HM Revenue & Customs – a key creditor, to which the chain owes about £8m in taxes and duties – opposed a rescue plan which the firm believed was essential to its survival. It is now likely to be wound up and sold off in chunks, with the cash raised going to owners and creditors. Despite its feted past, Oddbins was loss-making for most of this century, squeezed by the might of the supermarkets which now account for 70% of UK wine sales and can deliver sancerres and shirazes to the door along with the weekly groceries. Former competitors such as Unwins, Wine Cellar and First Quench Retailing – owner of Threshers, Wine Rack and The Local – have already gone. Only Majestic Wine has thrived, carving out a successful upmarket niche that occupies similar ground to Oddbins in its heyday. Following a difficult Christmas and with the retail environment showing signs of getting even tougher, Oddbins was unable to secure sufficient backing for a rescue plan that would have seen landlords agree to a 30% cut in rents, and payment in monthly rather than quarterly instalments. The deal equated to a payment to landlords of about 21p in the pound. An Oddbins spokesman said Baile reported that “a number of potential investors have come forward to buy the business, or parts of it, as a going concern and although nothing is certain he remains optimistic”. The news came amid another grim day for the sector, which has seen shoppers retrench in the face of rising prices, higher VAT and the uncertainty created by government cuts. Mothercare and Laura Ashley both warned that trading had deteriorated considerably in recent weeks while Easy Living Furniture, a 20-strong chain in the south of England, also went into administration. H&M, the Swedish fashion chain with a large presence in the UK, announced a surprise 30% dip in its profits in the three months to February, as it suffered from the widespread decline in consumer spending. The prospect of any recovery on the high street was further dented as the Bank of England reported that the number of people defaulting on their mortgages rose unexpectedly in the first three months of the year. Howard Archer, chief UK and European economist at IHS Global Insight, said: “Consumer confidence remains extremely weak, thereby maintaining concern that consumers will be very cautious in their spending over the coming months in the face of serious headwinds. “Consumers’ purchasing power is currently being increasingly squeezed by high and rising inflation in tandem with ongoing muted wage growth overall. In addition, the weak housing market has adverse repercussions for consumer spending,” he added. The developments continued the bad news in what has been one of the gloomiest weeks for retail announcements in years, causing the spotlight to shine even brighter on the government’s public spending cuts. It emerged on Tuesday that Britons’ spending power fell last year for the first time in three decades. So-called real household disposable income – the total income of Britain’s working and unemployed populations after taxes and adjusted for inflation – dropped by 0.8% in 2010, according to the Office for National Statistics. On Wednesday, the boss of electricals group Dixons said that the government’s cuts were having a “chilling effect” on consumers as the group announced that like-for-like sales at its Currys and PC World stores in Britain and Ireland tumbled by 11% in the last 11 weeks. Signet announced weak trading at its H Samuel and Ernest Jones stores in the UK. DFS, the sofa retailer, said growth had slowed and even Domino’s Pizza, the stock market darling, was forced to admit that it was being dragged down by its Irish stores where like-for-like sales dropped more than 10% in the first quarter. Retail industry Dixons Retail Mothercare Laura Ashley Wine Tom Bawden Fiona Beckett guardian.co.uk
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on March 31, 2011. Filed under News, Politics, World News.
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Oddbins goes into administration
Struggling wine retailer becomes victim of triple threat of credit crunch, supermarkets and tax collectors Oddbins looks likely to become the retail sector’s latest victim after the struggling wine retailer caved in to the combined forces of the credit crunch, supermarkets and tax collectors, and went into administration. All 400 jobs at the 128-strong chain are at risk, although the company said it remained optimistic that some could be saved. Simon Baile, the managing director who took control of the firm in 2008, said: “We very much regret the need to make so many staff redundant and we are working diligently to find a buyer for the majority of the business so that as many jobs as possible may be saved.” Oddbins, which started life in 1963 and was once celebrated for its expertise and eccentric staff, was forced to give up the fight after HM Revenue & Customs – a key creditor, to which the chain owes about £8m in taxes and duties – opposed a rescue plan which the firm believed was essential to its survival. It is now likely to be wound up and sold off in chunks, with the cash raised going to owners and creditors. Despite its feted past, Oddbins was loss-making for most of this century, squeezed by the might of the supermarkets which now account for 70% of UK wine sales and can deliver sancerres and shirazes to the door along with the weekly groceries. Former competitors such as Unwins, Wine Cellar and First Quench Retailing – owner of Threshers, Wine Rack and The Local – have already gone. Only Majestic Wine has thrived, carving out a successful upmarket niche that occupies similar ground to Oddbins in its heyday. Following a difficult Christmas and with the retail environment showing signs of getting even tougher, Oddbins was unable to secure sufficient backing for a rescue plan that would have seen landlords agree to a 30% cut in rents, and payment in monthly rather than quarterly instalments. The deal equated to a payment to landlords of about 21p in the pound. An Oddbins spokesman said Baile reported that “a number of potential investors have come forward to buy the business, or parts of it, as a going concern and although nothing is certain he remains optimistic”. The news came amid another grim day for the sector, which has seen shoppers retrench in the face of rising prices, higher VAT and the uncertainty created by government cuts. Mothercare and Laura Ashley both warned that trading had deteriorated considerably in recent weeks while Easy Living Furniture, a 20-strong chain in the south of England, also went into administration. H&M, the Swedish fashion chain with a large presence in the UK, announced a surprise 30% dip in its profits in the three months to February, as it suffered from the widespread decline in consumer spending. The prospect of any recovery on the high street was further dented as the Bank of England reported that the number of people defaulting on their mortgages rose unexpectedly in the first three months of the year. Howard Archer, chief UK and European economist at IHS Global Insight, said: “Consumer confidence remains extremely weak, thereby maintaining concern that consumers will be very cautious in their spending over the coming months in the face of serious headwinds. “Consumers’ purchasing power is currently being increasingly squeezed by high and rising inflation in tandem with ongoing muted wage growth overall. In addition, the weak housing market has adverse repercussions for consumer spending,” he added. The developments continued the bad news in what has been one of the gloomiest weeks for retail announcements in years, causing the spotlight to shine even brighter on the government’s public spending cuts. It emerged on Tuesday that Britons’ spending power fell last year for the first time in three decades. So-called real household disposable income – the total income of Britain’s working and unemployed populations after taxes and adjusted for inflation – dropped by 0.8% in 2010, according to the Office for National Statistics. On Wednesday, the boss of electricals group Dixons said that the government’s cuts were having a “chilling effect” on consumers as the group announced that like-for-like sales at its Currys and PC World stores in Britain and Ireland tumbled by 11% in the last 11 weeks. Signet announced weak trading at its H Samuel and Ernest Jones stores in the UK. DFS, the sofa retailer, said growth had slowed and even Domino’s Pizza, the stock market darling, was forced to admit that it was being dragged down by its Irish stores where like-for-like sales dropped more than 10% in the first quarter. Retail industry Dixons Retail Mothercare Laura Ashley Wine Tom Bawden Fiona Beckett guardian.co.uk
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