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.
Written by decanter.com staff, and agencies