Costcutter rules itself out of deal to buy off-licence stores
Wednesday 25 November 2009
A private equity investor and a large convenience stores chain have pulled out of the bidding for stores owned by First Quench Retailing, the off- licence group which collapsed into administration last month.
The exit of Threshers and its owner First Quench comes after the administrator KPMG said – in a letter this week seen by The Independent – that it had "formally rejected" a joint bid by 55 Threshers franchisees to buy back their stores. It has emerged that Endless, the Leeds-based private equity firm, and Costcutter, the convenience stores chain, have both ruled themselves out of buying the remaining 500 stores which are still open.
KPMG has already closed about 750 former FQR stores, which are being marketed by Christie & Co. Endless declined to comment yesterday. Colin Graves, the managing director of Costcutter, told Off Licence News: "We looked at it long and hard, but the figures don't add up. There were too many problems."
FQR – the 1,200 off-licence group that includes Wine Rack, Haddows, Victoria Wine and The Local – appointed KPMG as its administrator last month.
It is understood that KPMG is now unlikely to find a buyer for the 500-store estate as a going concern. The likely scenario is that the six potential buyers remaining will purchase parcels of stores. Indicative offers were due in on 13 November and KPMG wants to complete the sale over the coming days.
In a letter on Monday, KPMG's joint administrator Ian Corfield said: "The joint administrators are now in advanced talks regarding the sale of the business with a number of interested parties and have ascertained that parts of the portfolio, consisting of just over 500 stores, are of interest to these potential purchasers."
The off-licence operators Rhythm & Booze, Bargain Booze and EFB Retail are thought to have expressed interest in packages of stores, while Greggs the baker has been eyeing about 100 stores.
In Mr Corfield's letter, he said Christie and Co were "prepared to consider offers from franchisees on an individual basis for assignments of the company's interest in the various leases".
However, taking a tougher line, Mr Corfield said it would be a "condition of any agreement for an assignment" that all amounts owed to the company were "settled in full". He added that franchisees would be updated shortly on their accounts. But the rejection of the 55 franchisees' offer for stores could result in the franchise agreement disappearing. This could be a positive move, freeing franchisees to trade as independents. They could either buy the leases themselves or remain as tenants of whoever buys them.
Lost in the post: Strikes harm online retailers
Last month's postal strike appears to have cost online retailers as much as £53m. Figures published yesterday by the retail analyst IMRG and consultant CapGemini showed that Britons spent £4.2bn on internet purchases in October – 11.8 per cent more than the same month last year.
But growth dipped significantly during the second half of the month, with sales falling by 2 per cent during the third week of October, when the strikes were held, and a further 5 per cent the following week amid mounting public concern about the backlog of deliveries at Royal Mail depots.
However, IMRG and CapGemini said the postal strikes might encourage shoppers to buy Christmas presents earlier this year. While further industrial action is now unlikely before the festive season, the perception that deliveries might be subject to delay could spur shoppers.
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