Leading UK chain Majestic wine has bought wine merchant Lay & Wheeler for £6 million.
Majestic has agreed to pay £4.75m for the fine wine specialist and taken on approximately £1m in debts.
Despite the economic downturn, chief executive of Majestic Steve Lewis said it could not miss the chance to acquire the merchant. 'Opportunities like this don't come along very often and you have to grab them when they do,' he told decanter.com.
'£6m is modest by Majestics' standards and given the clear and continuing appetite of our customers for fine wine, Lay & Wheeler is an extremely good fit with Majestic,' he added.
The acquisition may cause come surprise following the words of Majestic's former chief executive, Tim How, at a parliamentary committee last week: 'I'm extremely concerned by the outlook for the rest of this year and well into next. The position of the industry is very fragile, certainly the worst in my time. I would have thought it will cause Majestic to consider its rate of expansion,' he said.
Lay & Wheeler will continue to operate from its current base in Suffolk with Johnny Wheeler, the only remaining family representative within the business taking the role of president of Lay & Wheeler. Jeremy Palmer, who has until now been Majestic commercial director, will take over the day to day running of the Suffolk company as managing director. Lewis would not comment on the future of its 35 staff but will meet them on Monday 9 March.
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Is someone going to tell us why the "unmissable opportunity" arose? Was Lay & Wheeler in financial trouble? Since Johnny Wheeler took over from his father, L&W has become a money grabber, more interested in cash than wine.
Keith Sanderson, Garstang, UK
Another great shame for the industry as the large company sweeps up the small! Majestic may champion quality, staff education and service but the reality is they are yet another big retailer whose only real commitment is to huge profits and forcing out their competitors! If you look closely as their range how different is it to the supermarkets? If you want something interesting, stick to the independent merchants!
Robert Bagot
I am worried by this news. While I am an admirer of Majestic I am passionate about L&W and buy a lot of my wine from them. They are a great company who provide a fantastic service, brilliant wine tastings, amazing tasting cases via the 'Wine Discovery' club. Most of all they are independant and this is refelcted in their wine list. What will happen to all the Bonded Accounts held at Vinotheque?
Paul Cullen
There is no doubting that the fine wine market is facing a crises. Everyone I have contact with, who is associated with the Fine Wine Trade is finding it very tough and I see no reason why Lay and Wheeler are any different. Globally we are in unprecedented times with the world economy as it is I can see other fatalities coming should we not see any change emanating from the major chateaux of Bordeaux.
Nick Stephens
I am saddened to read of the acquisition of L&W by Majestic. Whilst I have nothing against Majestic other than they were the competition when I worked for Oddbins, it seems incredible that a relative newcomer should gobble up a long established wine merchant, that only a few years ago seemed to be doing so well. But I suppose it is no different to the wine merchants that Oddbins gobbled up during its expansionary phase. I remember attending tastings at the Wine Market particularly one called Syrah v. Shiraz and being blown away by a wine I'd never heard of before -Henschke Hill of Grace 1985! It was GBP 10.00, and I think it was in the early 90's. It's a pity I didn't buy a case, but hindsight is a marvellous thing! What went wrong with L&W or did Majestic get big enough to make an offer they could not refuse?
James Tilbrook, Tilbrook Estate, Adelaide Hills, South Australia
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Is someone going to tell us why the "unmissable opportunity" arose? Was Lay & Wheeler in financial trouble? Since Johnny Wheeler took over from his father, L&W has become a money grabber, more interested in cash than wine.
