Conviviality, the company behind the off-licence chains Bargain Booze and Wine Rack, is to appoint administrators within a fortnight, putting 2,600 jobs at risk.
The impending administration has prompted warnings that pubs could run dry. More than 20,000 of Britain’s pubs are supplied by the company’s Matthew Clark division. The trade body, the British Beer & Pub Association, said many could now face “short-term supply issues”.
Conviviality said following discussions with its banks, the board had decided to to appoint administrators within 10 business days, unless circumstances change. The secured creditors can also appoint administrators without filing notice.
Bargain Booze owner Conviviality on brink of collapse
The news came a day after the company said investors had refused its request for a fresh cash injection of £125m, needed to stave off bankruptcy after a string of profit warnings. The first profit warning was related to Conviviality’s failure to budget for a £30m tax bill. Its chief executive, Diana Hunter, has stepped down.
Directors are still looking for a buyer for all or part of the business, and it will continue to trade.
The firm said in a stock market statement on Thursday: “The directors intend to allow the business to continue to trade and the company continues to work alongside advisers in order to preserve as much value as possible for all stakeholders as it explores a number of inbound enquiries regarding a potential sale of all or parts of the business.”
Conviviality supplies more than 700 off-licences and more than 23,000 pubs and restaurants including the JD Wetherspoon chain.
The firm’s shares remain suspended from the junior Aim market. Investors are likely to receive “little to nil” value for their shares, the company said.
Accountancy firm PricewaterhouseCoopers is expected to manage the administration.