Just two years after Bibby – which also owns Costcutter – paid £3.8 million for the 68 shops then in the R&B estate, it has said that the fascia is not part of its long-term plans.
Conviviality Retail bought the 26 stores and plans to convert them into Bargain Booze or Wine Rack stores.
Bibby director and Costcutter chief executive Darcy Willson- Rymer, said: “Following a review we have come to the conclusion that we want to focus on our core of convenience, where we see great opportunities to grow, together with our members.
“As a result, a decision has been made that Rhythm & Booze will no longer form part of the future strategic plans for Bibby Retail Services.
“We are delighted to find a solution to sell a number of these stores to a buyer who intends to retain all employees involved.
“We continue to explore strategic options in relation to the remaining operations.”
There had been speculation that Conviviality would buy the Rhythm & Booze brand, but this was not included in the latest deal.
The sale of the brand and the 25 remaining branches to another operator remains a possibility, with Oddbins owner European Food Brokers the most likely, but a long queue of suitors is not expected.
When Bibby bought R&B in a pre-pack administration in 2012, then-Costcutter chief executive Nick Ivel described the opportunities for the specialist off-licence chain as “endless”, but last year’s formation of the Buyco joint venture between Costcutter and Palmer & Harvey put Bibby’s focus firmly on multi- discipline convenience retailing.
Conviviality is paying £1.7 million for the 26 R&B shops, which it says will plug geographical gaps in its estate in northern England.
It said that “over time” it intended to transfer the stores from their existing managed operation to the group’s franchise model.
In the 2013 calendar year, the 26 stores in the package generated revenue of £13.7 million and net profits of £50,000 – an average of just £2,000 each, suggesting that potential future profitability rather than existing commercial
value put them at the top of Conviviality’s shopping list.
Five of the stores are freeholds with a market value of £540,000.
Conviviality chief executive Diana Hunter said: “The 26 stores provide opportunities for us to extend our reach into Yorkshire, offering growth opportunities for the company and our franchisees.”
The acquisition was Bargain Booze’s second since going public as Convivality last July, following September’s purchase of the Wine Rack brand and 22 shops from Venus Wine & Spirit Merchants.
Conviviality said this week that sales in Wine Rack shops increased 6.5% in the 27 weeks to April 27, with Bargain Booze shops up 2.2%. Sales for the full-year to the same date were flat overall, but average sales per branch were ahead by 3.2%.
Andrew Humphreys will join the company as chief financial officer from June 16, replacing Julie Wirth.
Rhythm & Booze stores bought by Conviviality:
■ East Riding of Yorkshire Cottingham, Goole, Hedon, Howden
■ Lincolnshire Lincoln
■ North Lincolnshire Barton-upon-Humber, Brigg
■ North Yorkshire Ripon, Scarborough, Skipton
■ South Yorkshire Crookes, Cudworth, Great North Road in Doncaster, Stocksbridge, Thurnscoe, Wickersley, Wombwell
■ West Yorkshire Garforth, Holmfirth, Horbury Road in Wakefield, Horbury, Huddersfield, Ossett, Otley, Roundhay, South Elmsall