Threshers owner falls into administration

Published 30th Oct 2009

The company that owns Threshers, the 112-year-old off-licence chain, collapsed into administration last night, putting 6,500 jobs at risk.

First Quench Retailing, which also owns Wine Rack and The Local chains, brought in the accountants KPMG as administrators last night. KPMG is seeking to sell the company as a going concern. Staff at its 1,300 shops will be informed of the situation this morning.

First Quench has been hit by cut-price supermarket competition. The company lost £1.7 million before tax in the year to June 28, 2008, the latest for which figures are available, on a turnover of £687 million.

The recession has added to longrunning difficulties for off-licences. Last month Wine Cellar, which had 170 shops around the country, fell into administration, although 109 shops were sold to a new owner.

All the First Quench shops will remain open while a buyer is sought, it is understood. In a statement last night, First Quench said: “The board of FQR confirms that it has appointed KPMG as administrator this evening. The board’s discussions with KPMG confirm that the best prospects for the business is a sale as a going concern, thereby preserving as many jobs as possible.

“It is with great regret that the board was not able to brief our colleagues prior to it being made public”.

The company assured staff that next week’s wages would be paid. About 3,000 of its workers are full-time.

First Quench has been owned by Vision Capital, an American private equity company, since 2007. This year it warned that some of its shops would close if it was unable to renegotiate rents with landlords. It put in place a turnaround plan including cost savings, the closure of loss-making shops and cutting of stock.

The withdrawal of trade credit insurance, which was a critical factor in the collapse of Woolworths, harmed the company’s ability to buy stock. Drinks companies were reluctant to supply its off-licences without upfront payment because they could not insure unpaid invoices.

The first Threshers shop was opened by Samuel Thresher in 1897. It was bought by Flowers Breweries in the 1950s and became part of Whitbread, the current owner of Premier Inn and Costa Coffee, in 1962.

It was merged in 1998 with Victoria Wine, owned by Allied Domecq, before being bought by Nomura Principal Finance in 2003.

The failure this year of Wine Cellar and First Quench follows the collapse of Unwins in 2005. Threshers bought 200 shops from the administrators of Unwins.

One of the few retailers outside the supermarkets to prosper in recent years has been Majestic Wine Warehouses. Even this group, however, has not been immune to the impact of the recession and it recently reduced its minimum purchase requirement from twelve bottles to six in an attempt to drum up extra business.

Oddbins, which like Majestic prides itself on knowledgeable staff, has also had a chequered recent history. Last year, Castel, the French group that had paid £57 million for the chain in 2002, finally sold it at a massive loss.

First Quench owns Haddows, a Scottish chain, as well as Wine Rack, Threshers and The Local.

Source: ' Times '

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