UK: First Quench has credit lines withdrawn

First Quench Retail (FQR), the group behind the off-licence chain Threshers, has had its cashflow reductions and credit lines withdrawn as a result of the economic downturn.

In January, the company announced plans to close unprofitable stores in an attempt to cut costs and months later began a consultation process for the possible loss of 80 jobs.

A spokesperson for the private company told just-drinks today (9 June) that an Emphasis of Matter had been included in its year-end results by auditors Ernst and Young, and that it is "focused on uncertainties which reflect the unprecedented trading conditions".

An Emphasis of Matter paragraph is included in an audit report when an 'unusual' item occurs which, in the opinion of the auditor, is fundamental and requires disclosure.

"Cashflow reductions and credit lines have been withdrawn in our sector because of the economic downturn which is causing auditors to declare an increasing number of Emphasis of Matters," the spokesperson said.

"Results have been filed for the year ended 28 June 2008. At that stage, FQR was only around six months into its turnaround plan. A major restructure of the business is still underway and senior management have put in place a transformation programme to address the key operational and commercial challenges facing the business and build a sustainable business model."

The company said the transformation plan includes a "clearly defined" retail strategy under the four brands, operational and commercial improvements, and "accelerated cost-cutting measures".