Tuesday, October 23, 2018

Bargain Booze aims to pay off debts with flotation on AIM market


Off-licence chain Bargain Booze is considering a flotation on the Alternative Investment Market.

The retailer, which has 611 franchise stores under the Bargain Booze, Select Convenience and Thorougoods fascia‘s and will float under the name Conviviality Retail, is currently owned by private equity firm ECI Partners.

The retailer wants to raise around £60m which would be used to buy out ECI Partners and other selling shareholders, as well as to repay all remaining debts to leave the company in a debt-free position, Bargain Booze said.

The chain wants to launch a Franchisee Incentive Plan through which Bargain Booze retailers will be awarded shares in the company. Shares will be given based on store standards, group targets, KPI achievements and new franchisee incentives. It is expected the company will have a market cap of between £62.5m and £70m after flotation.

ECI Partners had put Bargain Booze up for sale, but abandoned its hunt for a buyer in April last year.

Diana Hunter, CEO of Conviviality Retail since last November, has since implemented a strategy to extend the company‘s reach into new locations such as the south of England, as well as increasing the retailer‘s convenience and wine offer. The company could introduce a larger store format that might serve shoppers who prefer to buy in bulk.

“I see a great opportunity to grow this business through uniting and aligning the franchisees with the company, a most powerful force in generating optimal performance. Value has been totally democratised,” said Ms Hunter, who joined the group from Waitrose. “Everyone understands the importance of value now,” she added.