Oddbins still in the red but surge in sales points to a sparkling 2010

Published on Monday 8 February 2010 20:36

WINE merchant Oddbins has turned a corner, according to chief executive Simon Baile, and is this week expected to post its first month of continuous sales growth in more than four years.

Baile told The Scotsman Oddbins had narrowed its losses further in 2009 – from 6.2 million to about 3m – and he hoped the company would return to profit this year.

His comments will come as a boost to the ailing off-licence sector after the collapse last October of First Quench, which owned Victoria Wine, Haddows, Threshers and Wine Rack.

Baile said sales in Scotland had dipped by 4 per cent last year – on par with the rest of the UK – but that, after a steep fall in the spring, had returned to positive territory by the end of 2009.

He added: "We're absolutely flying. In the past couple of weeks, we've been seeing double-digit growth in Scotland, with Glasgow alone up 25 per cent in the past week.

"Across the UK, we're about to end four weeks of continuous growth, and Oddbins hasn't seen that for four years. We're starting to see strong sales growth in a consistent partner."

Since buying the business from French drinks giant Castel Freres in August 2008, Baile has stripped out about 1,000 wines and introduced 450 fresh lines.

The chain was founded in 1963 by entrepreneur Ahmed Pochee and bought in the 1970s by Dennis Ing and Baile's father, Simon, before passing into the hands of Seagram in the 1980s.

Baile has shrunk the chain from 158 to 128 stores, including 24 in Scotland, and has axed part-time staff who were no longer needed. He is aiming for "double-digit" growth during 2010 and thinks the target is achievable, allowing Oddbins to return to the black.

Accounts for 2008 showed losses had narrowed by 40 per cent to 6.2m and Baile said the gap had decreased further to about 3m last year.

When he and business partner Henry Young bought the firm in 2008, Baile had aimed to turn a profit that year but "that was before we knew UK GDP was going to fall by 6 per cent" he said.

The collapse of First Quench – which also owned off-licence chains Bottoms Up and The Local – removed one of Oddbins biggest competitors, but Baile is cautious about how much business he will pick up.

He said: "You've got close to 600m of sales out there that have disappeared and they have to go somewhere. Even if we got 2.5 per cent of that, a tiny fraction, then that would be 13m or 14m, and I think we can achieve that.

"In Scotland, there are 40 to 50 stores closed in Glasgow alone, and we're already seeing a swing out of it. It's adding 5 or 6 per cent of sales to Oddbins stores that are close to old First Quench outlets."