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Wine News

Oddbins reports increased losses

Wine merchant Oddbins saw losses almost triple last year to £8.7 million from £3m in 2005.

In his report, finance director Tim Daunt said the loss was partly due to 'a fall in margin due to lower product prices'. During the reporting period, to the end of December 2006, the company had abandoned individual price promotions in favour of lower all-year round prices with discounts on bulk purchases.

Sales for the company, which is owned by the French group Castel, fell only 0.4% from £121.8 million to £121.3 million in 2006. During that year the group closed 18 unprofitable stores, while opening 29 new Oddbins and converting some others to Nicolas, which Castel also owns. Currently, there are 175 branches of Oddbins in the UK as well as 81 Nicolas shops.

Tim Daunt said, ‘In the face of increased competition and overhead costs, Oddbins has been taking steps to improve its long-term performance. These steps started in 2006 with a full overhaul of its estate, a new pricing strategy, development of its wholesale business and a review of its working capital, the costs of which have cost the company in the short term. However, despite making an accounting loss in 2006, the company generated cash and will deliver a significantly improved result in 2007.’