Off-licences hit and more shops misery is on the way

A YEAR after Threshers went bust, fewer than a third of its 1,400 stores have been reopened as off-licences, administrators have said.

Only 400 of the stores were sold, with the majority being bought by small off-licence chains, and the other 1,000 returned to landlords, said accountancy giant KPMG, which is still working on the administration.

The national off-licence business model has been weakened by competition from supermarkets which with their immense buying power can sell alcohol cheaper than anyone else.

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First Quench Retailing (FQR), which owned the Threshers, Wine Rack, Victoria Wine, Bottoms Up and Haddows fascia, went into administration with the loss of 6,300 jobs.

Unsecured creditors still owed money by FQR, including alcohol giant Diageo, lost a total of 41 million when it collapsed and are expected to get 1.4p in the pound back.

Some of the names that traded on the high street will live on. The Threshers, Bottoms Up, The Local and Victoria Wine brands were sold to a small property and discount stores business, SEP Properties, in the West Midlands which said at the time it intended to open an internet wine business and a chain of off-licences.

The Wine Rack name was bought by London-based Venus Wine and Spirits.

KPMG is expecting a fresh wave of retailers to go bust after Christmas as January's increase in VAT hits the weakest hardest.

It said January is normally the bleakest time of year for retailers because they see a post-Christmas dip in trading but this year will be made worse by the tough trading conditions and the hike in VAT.

Richard Fleming, head of UK restructuring at KPMG, said: "The effect on consumer confidence, combined with the slow post Christmas period, is likely to tip many strugglers over the edge in 2011."