Conviviality Retail, the owner of UK off-licence chain Bargain Booze, has signed a deal to buy wine retailer Wine Rack for GBP1.65m (US$2.6m).

In an announcement today (2 September), Conviviality said that it has agreed to acquire the entire share capital of the company behind Wine Rack, L.C.L Enterprises, in cash. The deal includes Wine Rack's 22 predominantly Greater London located stores.

Conviviality, which floated on the AIM stock exchange in July, said the acquisition will allow it to boost its presence in the south of England, away from its north-west heartland. It currently has around 600 franchisee-owned stores. 

"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,” said CEO Diana Hunter.

Conviviality said it intends to retain the Wine Rack stores and that the existing store teams and Ron Booker, Wine Rack's regional operations manager, will remain with the business. It added: “Conviviality expects to offer the opportunity to franchise the format in the future and it is also intended that additional franchised stores will open using the Wine Rack brand.”

Bargain Booze was acquired by private equity group ECI Partners in 2006.