Conviviality - Boy, that escalated quickly - Comment

Conviviality will go into administration within the next two weeks

Conviviality will go into administration within the next two weeks

Conviviality has admitted defeat in its survival battle, with administrators set to be appointed at the beleaguered group.

Less than a month after issuing a profit warning, the UK drinks wholesaler and retailer, which employs 2,600 people, confirmed this morning that discussions with its lending banks have failed to find a solution to its cashflow issues. The announcement comes on the same day as the deadline for payment of the GBP30m (US$41.8m) tax bill that Conviviality didn't discover until two weeks ago.

The group had been working to secure GBP125m in funds to stay afloat.

"Unless circumstances change, and in accordance with statutory requirements, the board intends to appoint administrators within ten business days," the company said today. "The secured creditors can, however, appoint administrators without the requirement for notice."

Conviviality is exploring "a number of inbound enquiries" from interested parties for a sale of "all or parts of the business".

On 19 March, CEO Diana Hunter stepped down. In her five years with Conviviality, the group bought off-premise chain Wine Rack, took full ownership of on-premise distributor Matthew Clark from Accolade Wines and Punch Taverns and acquired Bibendum PLB for GBP60m (then-US$88.5m). In December last year, Conviviality also snapped up 109 more off-premise outlets, as well as franchise rights to 18 more stores, all of which operated under the Central Convenience brand name.

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Expert analysis

Country Profile: Wine Sector in the UK

Country Profile: Wine Sector in the UK

GlobalData’s Country Profile report on the Wine sector in the UK provides insights on high growth markets to target, trends in the usage of packaging materials, category level distribution channel more