About 2,000 jobs are set to be saved with the buyout of retail chains Wine Rack and Bargain Booze in a £7m deal.
The retail division of troubled drinks group Conviviality has been acquired by grocery wholesaler Bestway in a pre-pack administration process, which allows the buyer to cherry pick a collapsed company’s best assets at a bargain price.
The deal was completed just before midnight on Friday.
Matthew Callaghan, partner at PwC, said: “This deal safeguards the jobs of more than 2,000 employees, ensures franchisees have the ability to continue to trade and creates some much-needed stability for business customers and the sector in general.
“Alongside the sale of Conviviality’s Direct business earlier this week, the total number of staff whose jobs have been protected stands at more than 4,000.”
Bestway, which was founded and is chaired by the billionaire Sir Anwar Pervez, is one of Britain’s biggest food wholesalers serving thousands of retailers; it also owns the Well pharmacy chain, which it bought from the Co-op in 2014.
Conviviality announced its intention to appoint administrators last week after a string of profit warnings and the discovery of a £30m tax bill, putting more than 2,600 jobs at risk.
On Wednesday, Magners owner C&C bought Conviviality’s wholesale arm through a pre-pack administration. The Irish cider giant bought wholesalers Matthew Clark, Bibendum, Catalyst, Peppermint, Elastic and Walker & Wodehouse for a nominal sum. Stella Artois and Budweiser maker AB InBev is also supporting the deal. PwC handled the sale and administration process.
Conviviality’s retail arm operates more than 800 stores under brands including chains Select Convenience, Central Convenience and Wine Rack as well as Bargain Booze, many of which are run by independent franchisees.
The breakup of Conviviality marks the end of the firm after rapid demise over just a few weeks.
The chief executive, Diana Hunter, stepped down last month after shares in the company were suspended at 101p in the wake of two profit warnings in the space of a week that wiped more than 60% off its stock market value.
The company blamed the first shock profit warning on a spreadsheet arithmetic error made by a member of its finance team and weakening profit margins and then admitted it had not budgeted for the £30m tax bill due at the end of March.
Conviviality issued a third profit warning as it admitted it needed to ask investors for new funding of £125m to avoid going bust, but failed to convince them of its long-term future.
Former investors in Conviviality are considering a lawsuit after raising questions over the company’s strategy in making a string of rapid acquisitions, including the recent purchase of more than 100 Central Convenience stores from the collapsed Palmer & Harvey business.
Meanwhile, the chair of parliament’s work and pensions committee, Frank Field, has questioned the role of the auditor KPMG.
