Conviviality Retail acquires 26 Rhythm & Booze Stores for £1.7m

By Gemma McKenna

Published: 06 May, 2014

Conviviality Retail, which owns Bargain Booze and Wine Rack, has bought 26 Rhythm & Booze off-licences in Yorkshire and the north east from Bibby Retail Services for £1.7 milllion.

The group says the purchase "opens up some key regions" it is not currently strong in, offering "great locations" to franchisees. It plans to convert the stores to its franchise model over time.

Conviviality plans to keep all store staff and rebrand the stores under an appropriate fascia, of either its Bargain Booze, Select Convenience or Wine Rack brands. Contracts exchanged on May 2 with the deal set to complete on May 16, following a consultation period for transferring staff.

For the year ended 31 December 2013, the 26 stores to be acquired generated revenues of £13.68 million and net profits of £50,000. Five of the stores are freehold properties, with a combined value of £540,000, while the other 21 are held under lease.

Conviviality's directors believe the stores provide an "excellent geographic fit" and that their profitability will grow after they are rebranded to Conviviality fascias. It will be further boosted by leveraging Conviviality's buying power, the group said.

The deal includes £1.5 million in cash, which comes from the Conviviality's current cash resources, as well as a deferred consideration of £200,000.

Diana Hunter, chief executive of Conviviality, said: "This acquisition in entirely in line with our strategy for geographic expansion. The 26 stores provide opportunities for us to extend our reach into Yorkshire, offering growth opportunities for the Company and our franchisees. The 26 stores provide opportunities to expand our Bargain Booze, Select Convenience and Wine Rack fascias."

Conviviality Retail owns the UK's largest franchised off-licence and convenience chain with 600 stores. Franchisees recently shared more than £180,000 in the company's first payout of its Franchisee Reward Scheme.

The stores are located throughout England and Wales and operate under six fascias including Bargain Booze, Bargain Booze Select Convenience, Thorougoods and Wine Rack. The company listed on AIM in July 2013.

Rythm & Booze, owned by Bibby Retail Services, has sold half of its 52-strong estate in the deal.

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