Lay & Wheeler president Johnny Wheeler has denied claims that the takeover of the merchant was forced on the family firm by falling revenues.
Speaking at the first customer event under the new ownership – a tasting of southern Rhône 2007s – Wheeler revealed that the deal had been in the pipeline for two years.
‘The process was started under [the now retired former chief executive of Majestic] Tim How,’ said Wheeler, who also denied the deal had been expedited by the economic downturn. ‘It actually nearly went through last year,’ he added.
Rumours of a possible sale had been circulating the 50-year-old firm for some time, but many commentators were surprised by Majestic’s swoop.
Incoming managing director and former Majestic commercial director Jeremy Palmer claimed, though, that the deal represented a ‘perfect fit’.
‘We’ve seen a good deal of growth in the higher end of Majestic’s sales, above £8. But with the exception of some of our high-end stores, we had nowhere else to go to supply those customers who wanted to buy such wines.
‘Many of our customers were also buying fine wine elsewhere. But it was difficult for us to move into this sector.’
Although he hinted at some Majestic stores housing a certain proportion of L&W’s range in time, Palmer said the business would continue as a separate entity.
‘We have no intention of running Lay & Wheeler simply as a Majestic fine wine satellite,’ he said. He also ruled out the wholesale slimming of L&W ranges, saying that Majestic would nonetheless, ‘have to review things’ to insure against ‘doubling up’.
He was less committal when asked whether the L&W buying team would remain in place, declining to make any guarantees, but ruling out a ‘wholesale movement over of Majestic staff’.
Palmer also denied claims that Majestic had paid over the odds for the Colchester merchant. The £4.75m (plus £1m of debt), financed by Barclays Capital, is worth around 10 years’ worth of L&W profits.
‘Majestic has acquired Lay and Wheeler simply because we see a real opportunity to grow sales within both companies. Lay & Wheeler offers a full range of “fine wine services”, none of which Majestic does at present.’
Written by Guy Woodward