Since I wrote on Tuesday about the beleaguered state of Oddbins, there have been further developments. Off License News now reports that "Oddbins has applied to the courts go into administration to stave off winding-up orders from creditors ahead of next Thursday's meeting to vote on a proposed company voluntary arrangement. The company described the move as a "precautionary measure" and said its remaining 89 stores would continue to trade."
This measure effectively gives Oddbins a 10-day immunity against any winding-up orders, allowing for the vote on the proposed Company Voluntary Arrangement (CVA) to go ahead as planned, at a meeting of creditors on 31 May. However, unless the terms of the CVA are accepted at that meeting by at least 75% (in terms of value) by the creditors, then the company will almost certainly be forced into formal administration.
Bizarrely, British Gas appears to have played a significant role in forcing Oddbins' hand, since they are one of the companies (or perhaps even the only company) to have apparently applied for a winding-up order against Oddbins. The list of creditors on Deloitte's CVA document shows British Gas Business to be owed the princely sum of £57.65. Which seems a little strange, because business regulations normally dictate that a debt of at least £750 be outstanding before any single creditor can apply for such an order. Following a little digging, the intrepid Jim Budd now reports on his excellent blog, Jim's Loire, that the explanation for this is that "the amount listed as owed to British Gas excludes estimates." Whatever that means is anybody's guess - although it isn't inconceivable that the reported total debt of around 20 million Pounds is a rather conservative estimate.
Either way, the future for Oddbins now appears very bleak. Even if they manage somehow to stave-off formal administration in the short term, actually having any wine to sell may prove rather difficult. The problem is, having treated their suppliers (both wine growers and UK importers/agents) so shabbily, why would those same suppliers ever want to to do business with Oddbins again in the future - especially if they are forced to accept just 21% of what they are already owed (and over a 4 year period, at that)? There is simply no longer any basis for trust or goodwill. If, as reported elsewhere, the Oddbins management are so confident that they can re-build their business, why not show a clear resolve to (eventually) pay back 100% of what they owe? Anything less is unsatisfactory, but 21% is quite frankly an insult.
Always assuming that their existing suppliers do what they are being asked to do and cut their losses, who on earth will take their place in the longer term? No sensible grower would touch them with a bargepole ,unless it was on a strict "payment with order" basis.
I take no personal pleasure from reporting on the seemingly inevitable demise of Oddbins - too many people will lose their livelihoods and too many honest suppliers will face severe financial difficulty. As I said in my previous post, I am one of the countless enthusiasts for whom Oddbins played such a huge part in starting my love affair with good wine, and it is sad to see a once-great retailer fall so spectacularly from grace. But that was then - and this is now. And apart from the name, there really is little left for us sentimental wine lovers to lament - except for the fact that the dreaded supermarkets will now have even less competition from the high street.
For another take on the subject of Oddbins, including some rather damning comments by the trade, see the report entitled Suppliers being 'asked to fund Oddbins rescue' on the Harpers Wine & Spirit website.