Nicolas to sell non-London stores

Published: 13 August, 2010

French wine retailer Nicolas has entered into negotiations to sell all 18 of its stores located outside the M25 to a company set up by its former operations director.

Benoit Thouvenin left Nicolas this week to become managing director of Cheshire-based Spirited Wine. If the acquisition is successful, Thouvenin will acquire almost a third of Nicolas' UK-based estate, including top performing stores in Manchester and Edinburgh.

The deal marks a massive change in focus for the French retailer, which has admitted it is no longer profitable to operate outside of London.

"It is true that Deansgate in Manchester and George Street in Edinburgh are in the top 15 in terms of turnover, but they are not performing well in terms of profitability because the rents are too high," said Nicolas UK's managing director Eudes Morgan.

"We have decided to focus our activity on London where the potential is much better for Nicolas UK - with higher turnovers against rent levels that are really almost identical, especially when aiming at the best high street locations, and thus yielding a better profit.

"Moreover, with 48 shops within the M25, the administrative and logistical costs are obviously smaller than those associated with running a network of shops scattered around the country."

Morgan admitted that in its mission to develop outside of London, Nicolas "might have lost its identity" as a French wine specialist.

The partnership agreement with Spirited Wine means wines currently available in Nicolas stores and supplied by parent company Castel will continue to be available in stores outside London.

But Thouvenin also revealed plans to extend the Nicolas offering beyond France to "new, small suppliers" from Europe and the New World. Beer and spirits will also form part of the range "to make it more attractive for customers with a lower budget".

"We will try to find something different from the supermarkets," he said.

All staff employed in stores outside the M25 will be retained by Spirited Wine. "They have got great knowledge and are important for the business going forward," Thouvenin said.

The stores will continue to operate under the Nicolas name in advance of a complete rebranding exercise at the end of the year. The new name for the estate is yet to be decided.

Thouvenin added that acquiring more stores, including those in the former First Quench stable, would also be on the agenda. "We are open to everything. If there's a good opportunity or a good location, we're more than happy to look at it," he said.

The decision by Nicolas UK to sell 18 of its stores does not signal its intention to withdraw from the UK market entirely, according to Morgan. "We will, however, focus our efforts on the area within the M25 from now on," he said.

He added that Nicolas will be looking to acquire more stores within the M25 and has its eye on "areas of London where the Nicolas concept might work".

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