Conviviality swallows Wine Rack in SE growth drive
CHESHIRE’S Conviviality Retail has boosted its footprint in the London area with a £1.65m acquisition of a 22-store chain of Wine Rack Shops.
The company, which owns Bargain Booze, said the cash deal to buy L.C.L Enterprises is in line with its strategy to beef-up its presence in the south east
Crewe-based Conviviality said it believes that there is an opportunity to roll out a greater number of Wine Rack sites, both in the south and in other parts of the country. Both new and existing stores will benefit from combining the Wine Rack brand with Conviviality’s greater buying power, marketing expertise and logistics experience.
In its audited accounts for the year ended March 31 this year, Wine Rack generated revenues of £11.3m, EBITDA of £395,000 and a profit before tax of £180,000. Net assets as at 31 March 2013 were £0.48 million. At completion Wine Rack had no bank or other forms of loan indebtedness.
Diana Hunter, chief executive of Conviviality said: “Wine Rack fits perfectly with our stated strategy, outlined when we floated on AIM.
“This acquisition accelerates our expansion into the wine market, provides the company with additional expertise that will benefit our Franchisees and increases our footprint in the south of England, including adding scale in the important London market.
“We are looking forward to welcoming the current store teams and (regional operations manager) Ron Booker to Conviviality and we look forward to taking the Wine Rack brand from strength to strength with their involvement.
“The combination of greater buying power for Wine Rack and increased wine market expertise for Conviviality make this acquisition a positive move for all concerned.”
The company was advised on the acquisition by Nick Cowles and Andrew Jones at Manchester-based Zeus Capital.
