Inverarity out of the red as clients stay faithful to drinks supplier

WINE merchant Inverarity Vaults yesterday revealed it had swung out of the red after hanging on to its hotel and restaurant clients during the recession.

The Biggar-based firm – which supplies a range of Michelin-starred restaurants – increased its turnover by 4 per cent to 7.4 million in 2009 and moved from a pre-tax loss of 220,000 to a slender profit of 9,500.

Managing director Hamish Martin praised the role played by operations manager James Paterson, who was rewarded with a directorship in February.

Martin said Paterson had helped with the "nitty-gritty", which freed him up to look at the broader business.

Having been hit by the strong euro and banking crisis in 2008, Martin said he had renegotiated prices with his suppliers, which in turn allowed him not to increase prices to his customers.

He told The Scotsman: "We started 2009 really lean, able to run the business in the way we wanted to.

"While other businesses were struggling and going under, we were able to pick up good quality staff, doubling our wine sales team from six to 12 people, taking our total head-count to 43."

Staffing levels last year rose from 35 to 37, with the wage bill increasing from 917,417 to 928,717.

Martin said he had held on to all 600 of his trade clients, which include the exclusive Skibo Castle in Sutherland and the Dornoch Castle Hotel.

As well as its wholesale business, Inverarity operates retail shops – under the "One to One" brand – in Glasgow and Edinburgh. The firm also has an operation in Cornwall.

Martin said the current financial year had started well, with first-quarter sales "bang on target". His revenue target for 2010 as a whole is 9m.

He said: "We're really looking to motor now. We've got our buying right and have invested in our sales team."

Martin founded Inverarity in 1991 as a wine importer and whisky bottler. The firm still has its own blended Scotch and sells three of its own bottled malts.

Inverarity's profits come amid a difficult time for the hotel and restaurant sectors, with figures from the British Hospitality Association warning that turnover in the first quarter was down 4 per cent year-on-year.

In a sign of the difficulties that the recession posed for suppliers, Cockburns of Leith – one of Scotland's oldest wine merchants and supplier to Sir Walter Scott and Charles Dickens – fell into administration in January.

At the time, joint administrator Colin Dempster blamed the "economic downturn" for the company's woes.

Cockburns' brand and customer details were bought in February by former Rangers chairman Sir David Murray, who already owns wholesale business Wine Importers and two vineyards in France.