Closed branch on Monmouth Street, Covent Garden, London
Oddbins’ balance sheet plunged into the red during 2010 dropping £6.3 million in 10 months. By October their net assets were in deficit by £2.6 million.
The trading position of the stricken drinks company deteriorated dramatically during the 2010. In December 2009 the company’s balance sheet showed net assets, after removing the debt owed by Ex Cellars Investments Ltd, of £3.7 million. By February 2010 this had dropped to £2.15 million and continued falling to £491,000 in June and by September it was minus £1.85 million before dropping nearly another £1 million by mid-October. It is understood that the equivalent position in 2009 was a surplus of around £3.4 million.
Over the same 10-month period amounts owed to trade creditors increased as did the debt to HMRC for unpaid duty and PAYE. It is also known that an increasing number of UK agencies and importers as well as producers around the world were either declining to supply or requiring cash with orders.
Comment
The balance sheet suggests that Oddbins was in very serious trouble by October-November 2010. It may well be that Simon Baile and Henry Young pinned many of their hopes on being able to trade into a more favourable position by a spectacularly good Christmas.
It is understood that, under Castel, Oddbins had typically seen a big spike in sales, believed to be in the region of £2 million, close to Christmas. Under the new regime this had not happened in either 2008 or 2009. But perhaps 2010 would be different!
However, putting a big promotional campaign together for Christmas 2010 would doubtless have been a real challenge given the number of suppliers now declining to supply as well as those who had been supplying presumably getting increasingly concerned, angry and frustrated that their bills were not being paid despite assurances that their accounts would be settled.
Yesterday I emailed Simon Baile some questions (see below) on Oddbins’ financial situation in autumn 2010. I have yet to receive a response but, if and when I do, I will post it on Jim’s Loire.
Questions to Simon Baile
a) Last autumn what steps did you plan to take to improve Oddbins’ increasingly precarious financial position? Were these steps put into effect?
b) Perhaps you were hoping that buoyant Christmas sales would turn around the situation? Did you have any large promotions planned for Christmas 2010? If so, were they successful?
c) Did the increasing difficulty of finding suppliers prepared to sell wine to Oddbins hamper your plans for Christmas?
d) Given Oddbins’ financial position in the autumn 2010 why did you continue to assure suppliers that they would be paid?
Closure notice@Monmouth Street
