Blog: Oddbins runs out of time
Chris Mercer | 1 April 2011
If Oddbins had as many shoppers as admirers then would it still be going bust?
Oddbins is set to collapse into administration on Monday (4 April). The wine retailer's attempt to seal a company voluntary arrangement with its creditors has been scuppered by Her Majesty's Revenue & Customs, despite reasonable support for the cut-price repayment deal within the drinks trade.
Since just-drinks revealed Oddbins' current plight, many industry commentators have lamented the retailer's demise. Let there be no doubt, I also think it a shame that one of the UK's best-known wine retailers is on the rocks. It is also a shame because Oddbins has the highest average wine spend on the UK high street - GBP8 per bottle. So much for consumer education, huh?
However, there is an uneasy reality to the story. Put simply, if Oddbins is really so loveable, then why is it in this position?
Of course, there are external and historical factors. It's not easy operating in a market where the four biggest multiple retailers account for more than three quarters of wine sales. Added to that, Oddbins' current MD, Simon Baile, was dealt a tough hand by the previous owner, Castel Freres, which allowed the business to drift over several years. Oddbins' losses were GBP10m when Baile took the reins in 2008 and, within two years, he'd cut losses to GBP4m. Since 2008, legal wranglings over monies claimed by Castel have also repeatedly threatened to stifle Oddbins' rebirth.
At the end of it all, though, even the new-look Oddbins has not always made life easy for itself. Surely, key among the group's mistakes over the last couple of years has been to neglect the growth of online wine retailing? Indie rivals Majestic and Laithwaites have been much quicker to seize upon this trend.
At the same time, Oddbins' idendity on the high street is confusing. I don't think that enough consumers know what it stands for.
In the wide scheme of things, I would argue that it comes down to this: the UK's independent wine trade is not in terminal decline, but the way that it operates is changing and will need to change further if it is to hold consumers' interest.
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