High street specialist's profits dive in wake of new pricing

16 November, 2007

Oddbins blames falling margins and lower product prices for huge losses

Oddbins made a loss of £8.7 million last year , with increased costs and reduced margins

to blame, according to company secretary Timothy Daunt.

In his director's report, part of Oddbins' 2006 accounts published at Companies House, Daunt said the loss to Dec 31 was "driven by a fall in margin due to lower product prices" as the drinks retailer had abandoned individual price promotions in favour of lower year-round prices.

Costs associated with a higher average number of shops had also played a part, Daunt said.

Oddbins has gone further into the red since 2005, when it made a loss of £3 million, although

sales have stayed flat - £121 million last year, only 0.4 per cent down on 2005. Oddbins' growing wholesale business had helped to offset tougher retail conditions, Daunt said, although the company had been forced to make some support staff redundant.

The specialist retailer's accounts also reveal that, in April, it lent sister company Nicolas UK £17.7 million to enable it to buy 65 per cent of Oddbins' shares from parent company Sociéte d'Investissement d'Aquitaine SA.

Since January 2007, Oddbins has disposed of a number of unprofitable stores and converted others to Castel's Nicolas fascia. There are now 173 branches of Oddbins and 82 Nicolas shops in the UK.

Nicolas UK and Castel UK both increased turnover and profits during 2006, with Nicolas reporting a pre-tax profit of £273,001 against a turnover of £9.9 million, and Castel registering a profit of £1,040 against a turnover of £356,573.

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