Bargain Booze buys stores to tempt franchisees
Bargain Booze owner Conviviality Retail is in the process of buying two shops to run as “incubation” stores to sell on to new franchisees.
The company will use the stores to attract new franchisees who will be offered to buy them once established.
The shops will also be used to demonstrate best practice to existing franchisees as the chain tries to raise retail standards across the group and expand its geographical reach.
The plans form part of a strategy devised by new chief executive Diana Hunter which included an initial public offer of shares in the company at the end of last month.
Shares were offered to institutional investors at £1 each on July 31 with the offer over-subscribed twice over. Shares were this week trading at £1.52 on the open market.
The flotation will wipe out debts and help the Bargain Booze group in its ambitions to recruit new stores in Yorkshire and north east and south east England. Hunter aims to open 60 new stores by 2016.
The strategy includes more frequent store visits by operations staff, a performance-related share ownership scheme for franchisees, larger stores geared around bulk purchases and an increased focus on wine.
Hunter said: “We have an exciting future ahead of us with our new debt-free capital structure, an incentivisation plan that aligns our 461 franchisees with management and our shareholders, and capital to expand our footprint of stores from our heartland.”