Conviviality Retail lays out expansion plans
Conviviality Retail plans to ramp up Bargain Booze’s expansion into the south east, roll out Wine Rack stores across the country, bolster its online offering and trial a larger- format store as it seeks to build on strong trading figures.
The group reported a pre-tax profit increase of 31.5% to £9.3 million for the financial year ending April 27.
Conviviality said franchisee profit per store rose 10% and that franchisees were awarded 1.2 million shares, worth £5,700 per franchisee, for hitting performance targets.
Average retail sales per store were up by £16,000 and gross profit margin increased by 0.7%.
Chief executive Diana Hunter told OLN: “We are performing slightly ahead of expectations, so we are pleased with that. What has pleased us the most is that we have done it at the same time as improving franchisee profitability.
“Our work is not yet done. We have undertaken a lot of analysis of the existing estate and there is the potential to improve franchisees’ profits further so we want to work closely with them to help them continue to grow.”
The company cut 62 underperforming stores in the past year.
Hunter said: “That was a difficult decision but it was the right decision and we have now seen an improvement in the quality of the estate as a result of those closures. The number of closures has slowed down a lot now and we are continuing to open more stores so we are almost back to the number we had when I joined.
“The acquisition of the Rhythm & Booze stores has brought us some way to achieving growth.”
Conviviality bought 26 Rhythm & Booze stores initially and has just completed the purchase of a further five. Six have been converted to Wine Rack stores and the rest will trade under Bargain Booze.
Bargain Booze has taken tentative steps away from its northern heartland and recently opened in Ramsgate in Kent, Stevenage and Broxbourne in Hertfordshire and Leighton Buzzard in Bedfordshire.
Hunter said further Wine Rack and Bargain Booze stores would open across the UK and that details of the new larger- format store – trading under a completely new fascia – would be released later this year.
Bargain Booze is also launching a click-and-collect service along with an app
called As If It Wasn’t Cheap Enough, which offers shoppers personalised deals. Conviviality is working to improve the Wine Rack e-commerce site.
Hunter said the City has responded positively to the news coming out of the group, which floated on the AIM last year.
“The City investors are positive about the story we are telling them, that there is a role for high street off-licences in the market,” she said. “Franchisees want to open new stores again so we are delighted about that.”