Oddbins kick starts aggressive overhaul

03 October, 2008

The chain's new bosses cut out the dead wood as part of sweeping changes

Oddbins' new owners have begun their ambitious

plans

to turn around the business by closing

20 stores and reviewing its entire range.

Joint owners Simon Baile and Henry Young are confident the books will balance within the year despite reporting an annual loss

of £10 million last week .

Baile and Young are rumoured to have paid Castel £5 million for the chain in August. It's also believed that

another

£6 million is outstanding and this is to be paid by

insta lments of around £200,000 a month

over two years.

Since taking the reins, the

joint owners have moved to reduce costs by shedding

20

underperforming stores. The chain now has 131 sites.

Baile said: "We

have the right number of stores to take us forward and

balance the books . A chunk of stores that were dragging us down have gone and we are only keeping half the warehouse space. The results for 2007 are the best the company has had for two years."

He

said that a £4 million restructuring plan undertaken by Castel last year would

speed up the turnaround process. "Anyone can kick Castel, but hats off to them for trying. All the restructuring they have done has given us a big push to break even - and possibly make a profit. After that, it's up to us to be good retailers."

Fulfilling a

pledge

he made in August to focus on unusual wines,

Baile has overhauled the chain's "neglected" French wines

and axed one- third of the 150 lines it inherited from Castel.

A review of its wine portfolio will begin this month to create a core range that will be common to all stores and complement the small parcels

Oddbins' buying team has been charged

to source.

The retailer's current 20% off deal on 12 bottles will be extended across the

chain, while a selection of multibuy mechanics will also be introduced. Baile said: "Three-for-£10, £15 or £20 are important in the current market.

We want to simplify the types of offers we have."

But

Baile emphasised that price would not be the sole focus of

negotiations with suppliers. "It has to be about the wine first and the deal after."

In response to

suggestions that some suppliers were cautious about trading

with Oddbins until

a strategy was

formed, he

said: "I understand that the past [ figures] look horrible. But once suppliers understand what our plans are, conversations end up being different."




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