UK wine merchant Oddbins registered losses of over £8m last year.
The retailer – part of the French group Castel, which also owns high street chain Nicolas – increased its losses from £3m to £8.6m in the year to 31 December 2006, according to reports filed this week at Companies House in London.
In his director's report, company secretary Timothy Daunt said the loss was due to 'a fall in margin due to lower product prices'.
Sales were down only 0.4%, from £121.8m in 2005 to £121.3m in 2006.
During the reporting period the company said it had abandoned individual price promotions on wine and Champagne in favour of lower all-year round prices with discounts on bulk purchases.
Directors also reported they had 'earmarked a significant number of unprofitable stores for disposal in 2007'.
In 2007 there has been a series of closures of stores while others have been converted to the Nicolas brand. There are 173 branches of Oddbins and 82 Nicolas shops in the UK. When Castel acquired the chain in early 2002 for £57m, it consisted of some 230 stores.
A spokesman said, '2007 has been our year of review and change and we have been working hard to make the necessary changes to the business.
'We have been aware of our trading performance in 2006 but are confident we can turn it around in 2008, which will be helped by a number of new marketing initiatives.'
The fortunes of Oddbins are in stark contrast to the continued year-on-year success of rival Majestic, which in June this year posted an 11% increase in profits on the previous financial year. Premium wine sales and web business drove the boom, it reported.
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I used to work for Oddbins a few years ago, and in it's peak I would say that it was one of the best nationwide wine merchants in the UK. They had a huge selection of wine, were the first to introduce different countries (Australia and one of my favourites, Greece) and the staff were so passionate about what they did. By being owned by a french company, it does not surprise me that they are cutting back lines, and losing profit. Who wants to drink just French wine? And why would you want to pay on average, £6 or £7 for a bottle of soso wine!
I moved to NZ for 5 years and worked for another wine merchant over there, and there is no denying, times are tough for all wine merchants around the world. But you need to have one thing that stands out from the crowd, passion and knowledge, which I found, when I came back to the UK, that Oddbins distinctly lacks. What has happened to their art work? And who wants to buy clean skins (their french collection is distincly unimpressive)
It does sadden me that their shop numbers have fallen dramatically and that the honour of working for Oddbins is gone (it took me 3 tries to get into Oddbins) Maybe Castel need to sell onto to another company, who are enthusiastic and pasionate and can see past the profit margins, and can see that wine is a fun subject
Michelle Devlin, Glasgow, Scotland
It is a shame to see such a strong brand as Oddbins be run down by such incompetent head office management. The Castel executives have been responsible for one disaster after another since they bought the company. It is quite plain that the French executives of Castel have little knowledge of the UK market and this is reflected in the money they are losing. The more the Castel executives run Oddbins down the stronger their competitors become.
If there is anything else I can do to help you please contact me at anytime on the details below.
David Gibbons, NSW, Australia
It's hard to believe that a merchant as innovative as Oddbins has declined so rapidly. To be truthful I don't even give it a moments consideration when I'm looking for anything particular which is sad when I think how it used to be my first port of call.
Paul D, Tyne & Wear, UK
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I used to work for Oddbins a few years ago, and in it's peak I would say that it was one of the best nationwide wine merchants in the UK. They had a huge selection of wine, were the first to introduce different countries (Australia and one of my favourites, Greece) and the staff were so passionate about what they did. By being owned by a french company, it does not surprise me that they are cutting back lines, and losing profit. Who wants to drink just French wine? And why would you want to pay on average, £6 or £7 for a bottle of soso wine!
