By going into administration, Oddbins will gain a 10-day moratorium from creditors’ claims – allowing it to stay afloat long enough for its creditors to vote on a proposed company voluntary arrangement this Thursday. This is a deal that asks creditors to accept reduced terms, and enable the store to try to trade its way out of trouble. The retailer needs three quarters of creditors, in value terms, to back the deal – otherwise it faces bankruptcy.
You have to admire the wine retailer’s pluck. It’s been fighting to avoid collapse for weeks now, damaged by poor trading and a lack of cash. Oddbins cites the snow before Christmas as a massive problem, hitting some of its stores with a 50% drop in takings – hardly good given that’s supposed to be the time when booze sellers do their best business.
But while it may be getting hammered it’s managing to stay on its feet – just. The CVA deal would see it close 39 stores and its head office, as well as reduce rent payments by 30% on its remaining 89 stores. The obvious sticking point being that it would land the creditors only a fifth of what they’re owed.
Oddbins owner Simon Baile was recently quoted as saying the store ‘still has a heartbeat’. His plan now is to strip back to what he calls ‘core Oddbins’ – mainly city-centre shops in locations where the demographic is wealthy, and where foot traffic is high.
So while the defibrillator’s at the ready, it's not flatlined just yet...