The Bargain Booze chain has been acquired by Bestway, saving 2,000 jobs which were thought to be at risk.
The £7 million deal saw the food wholesaler acquiring the entire retail arm of Conviviality, previous parent company of Bargain Booze.
It is understood that 2,000 food jobs have been safeguarded under the terms of the deal, which was done during a pre-pack administration process to save the beleaguered Conviviality. This is a deal which involves a buyer being allowed to cherry-pick only the best assets of the company at a lower than market price, in order to settle any losses or debts the company may have.
Along with Bargain Booze, Bestway have also taken control of Wine Rack, WS Retail, and Select Convenience. Price Waterhouse Cooper was in charge of the sale and administration process. The deal, which set Bestway back by £7 million, will save the retail business after Conviviality realised they were unable to continue.
Bestway was founded and is still chaired by Sir Anwar Pervez, a billionaire businessman. It is one of the biggest food wholesalers in Britain, serving thousands of retailers and owning the Wells chain of pharmacies.
Beginning of the end
In the space of a few weeks, the profit warnings and the tax bill were followed by the resignation of Chief Executive Diana Hunter. Its shares were suspended, and while the company attempted to raise £125 million from investors, they were unable to put forward a convincing case.
The ailing firm announced they were appointing administrators only a week before the sale, after a line of profit warnings were overshadowed by a £30 million tax bill coming to light. With that final blow, they were no longer able to continue operating – putting more than 2,600 retail jobs at risk, and an implied potential domino effect on the supply chain.
There are more than 800 stores in the Conviviality retail arm. Not all of them have been snapped up by Bestway, with other parts of the business also already purchased by other buyers.
C&C, the firm which owns Magners, took over the wholesale arm of Conviviality, including brands Matthew Clark, Bibendum, Catalyst, Walker & Wodehouse, Elastic, and Peppermint – all for a nominal sum.
Conviviality had been running since 1981, growing to have a huge number of stores across the UK as well as becoming a key presence in the supply chain for the drinks industry in the UK. They supplied the JD Wetherspoon chain amongst others, for a total of more than 23,000 pubs and restaurants across the UK.
The key issue now will be ensuring that service is resumed as normal for those chains which will be effected by the sale, and hoping to maintain the jobs which have so far been acquired by other companies.
This is just the latest in a string of bad news for the UK retail sector, with a number of large businesses seeming to go under around the same time. Since January 2018 alone, Toys R Us, Maplin, and Jamie’s Italian have all bowed to the pressure and exited their respective industries. New Look, Select, Byron, and Prezzo have all had to resort to shutting venues across the country, resulting in heavy job losses before a new buyer steps in to take over the retail spaces.
While it may not be quite as drastic a change as the years of the double recession, which saw multiple companies folding within weeks of one another, this is still cause for concern for businesses across the UK. Many industries and sectors appear to be affected.