Bibendum has sold its private client business to a new fine wine trader started by one of the merchant's co-founders, with plans to open offices in key trading centres around the world.
Bibendum co-founder Simon Farr, who remains a non-executive director at the UK merchant, has joined with a group of unnamed, private investors to create the Cru London fine wine business and acquire Bibendum‘s private client arm.
The two firms will work closely together via a ‘comprehensive’ supply deal that gives Bibendum access to Cru London’s stocks, according to Bibendum managing director Michael Saunders.
Cru London Ltd will also trade as ‘Bibendum Fine Wine’ until spring 2014, but Saunders said that Bibendum has no direct ownership interest in the new company.
Cru London, meanwhile, will form part of a wider Cru Fine Wine business that will shortly also open offices in Bordeaux and Hong Kong. An exact time frame was not given, but more office locations are due to be added in 2014, according to its founders.
It will, though, face stiff competition in a fine wine market that has been subdued for much of 2013, albeit lower prices for Bordeaux have masked signs of rising consumer interest in wines from some other regions, such as Burgundy and Champagne.
Figures released this week show that the Liv-ex 100 index, which tracks the 100 most sought-after fine wines, fell by 2.5% in November, dropping to its lowest point for the year to date.
When questioned about the timing of the deal, Farr told decanter.com, ‘We are very comfortable with the long-term future for fine wine. We are not concerned about short-term pricing and demand disconnects.
‘Fine wine is a broadening category and of increasing interest to more parts of the world.’
For Bibendum, the deal ensures it can focus on core business while maintaining an import supply of fine wine for its restaurant customers, Saunders told decanter.com. The private client business represented around 5% of Bibendum’s annual sales. ‘This is about where you put your working capital.’
He added that he sees tentative signs of recovery in the UK restaurant trade, after several years of tough times. ‘Restaurants are filling up more across the country, but I wouldn’t say that it’s a done deal by any stretch of the imagination.’
Bibendum said it is taking full responsibility for fulfilling all outstanding orders for private clients, including en primeur purchases.
Written by Chris Mercer