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Christmas cheer for Conviviality as half year sales fall

Published:  20 January, 2014

Conviviality Retail, owner of Bargain Booze and Wine Rack, delivered strong Christmas results but its store closure programme saw half year sales fall by 5.2%.

The group, which acquired Wine Rack in August 2013, said retail sales for the 26 weeks to October 27 2013 fell by 5.2% to £261.9 million but that like-for-like sales increased by 1.5% and average sales were up 4.9% on the previous year.

Christmas delivered a festive fillip in the form of like for like sales growth of 2.8% in the two weeks to January 5 and average sales per store up year on year by 5.7%. The group is currently trying to improve the product mix across the estate and its sparkling wine and Champagne sales grew by 20%.

Wine Rack's performance was strong with like for like retail sales growth of 21.8% over the festive period. Its website - Conviviality's first online venture - performed particularly well, with traffic up 31% on last year and sales up 15.3%.

Overall the picture is bright, with group profit before tax excluding exceptional items increasing by 13.6% to £2.2m. The group is debt-free with a net cash balance of £11.9 million and has declared an interim dividend of 2p per share.

Bargain BoozeBargain BoozeBargain Booze owner Conviviality has closed 24 stores since the end of 2013's financial year, with 592 currently in operation, plus 22 Wine Rack stores.

The group has closed 24 stores since the end of 2013's financial year, with 592 stores now operating, plus 22 Wine Rack outlets.  It is currently repositioning its brand and has introduced new branding and point of sale material.

Bargain Booze owner Conviviality has closed 24 stores since the end of 2013's financial year, with 592 currently in operation, plus 22 Wine Rack stores.

A pilot Wine Rack store opened on November  in West Byfleet. This store features updated branding and point of sale communications, elements of which are being rolled out across the Wine Rack store estate. Early trading results of West Byfleet have been "encouraging".

Conviviality plans "build greater capability and credibility in wine to attract new customer groups" and is planning further "complimentary strategic acquisitions to drive long term value". It is also aiming to expand into new areas using a "mix of fascias and formats". In addition is wants to be recognised as "the suppliers' strategic partner of choice for the off licence and convenience channel".

The firm listed on the Alternative Investments Market on July 31, 2013.

Diana Hunter, chief executive of Conviviality, said: "As anticipated store numbers and therefore revenues have reduced in the first half of this financial year, this reduction is in line with our expectations and is consistent with our aim of improving the quality of our store estate. Work is underway to build a strong pipeline of new stores in higher quality locations for both Bargain Booze and Wine Rack and convert this pipeline to drive sales growth in future years.

"We are making progress across all elements of our strategy and expect the benefit of these initiatives to start to drive growth from the next financial year 2014/15.

"Our customers recognise our fascias as the place to shop for an unrivalled choice of great value off-licence."

David Adams was confirmed as chairman from January 31, together with two new non-executive appointments, Martin Newman and Steve Wilson, also effective from January 31. Kenton Burchell was announced as commercial director and will take up his position on March 3, 2014.

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