Turnaround Funds Eye UK Liquor Retailer Threshers

LONDON (Reuters) – Funds specialising in turning around troubled companies are among the favourites to buy the stores of British liquor chain Threshers from administrators, people familiar with the matter said on Friday.

Private equity firms, convenience store operators, rival off-licence chains and retailers are all poring over First Quench’s stores, which include Threshers and other chains, as its administrator KPMG looks to secure a speedy sale, the people said.

R Capital, the owner of Little Chef, the roadside restaurant chain that called in Michelin-starred chef Heston Blumenthal to revitalise the menu at the chain, is looking at the business, as is private equity firm Rutland Partners, sources said.

Hilco and Endless, which also specialise in turning around distressed companies, are interested in all or parts of First Quench’s network, sources said.

The firms declined to comment.

KPMG said on Thursday that it planned to close 373 loss-making First Quench stores, out of its 1,200 store network, at a cost of about 1,700 jobs. 

The stores, which include the Wine Rack, Victoria Wine, Bottoms Up and The Local brands, have been losing around 20 million pounds ($33.2 million) a year, hit by competition from large retailers and small convenience stores.

“We have had a range of interested parties considering everything from one store through to a very large number of stores,” said Ian Corfield, a joint administrator at KPMG.

Indicative offers are due by Nov. 13 with KPMG hoping to sew up the process by Nov. 26.


Large multiple retailers are also on the list of parties requesting further information, though First Quench’s stores are viewed as too small for the likes of Tesco (TSCO.L), Asda (WMT.N) and Sainsbury’s (SBRY.L), one source said.

Convenience store chain Costcutter and rival off-licence Bargain Booze are also considering offers, but their franchise model makes them more likely to be interested in First Quench’s small franchise arm, numbering some 86 stores, the source said.

“The franchise business may well be a very attractive proposition for somebody to take on as a unit; we are certainly exploring with various parties whether that will be of interest,” said Corfield, though he declined to comment on individual interested parties.

Costcutter’s majority owner Bibby Line Group and Bargain Booze’s private equity owner ECI Partners both declined to comment.

KPMG’s preferred option is to find a buyer for a large part of the business but it may consider offers for individual brands or even individual stores, Corfield said.

But carving out a brand could present difficulties in separating the business’ supply chain, back office function, logistics and IT, one source said.

“It’s not beyond the wit of man, but it’s not the easiest option either,” the source said. ($1=.6025 Pound)

By Simon Meads and Tom Freke
(Editing by Karen Foster)