Conviviality Retail, owner of fast-growing discounted alcohol retailer Bargain Booze, plans to add some sparkle to a resurgent Aim market with a listing on 31 July. Likely to be valued at between £60 million and £65 million, Conviviality offers investors a play on the twin themes of value and convenience.
Cheshire-headquartered Conviviality owns the UK's biggest franchised off-licence and convenience chain with over 600 stores. It provides buying, marketing and logistics services to over 460 franchisees who run stores under fascias including Bargain Booze and Bargain Booze Select Convenience.
Discount retail chain Bargain Booze, with a heavy concentration of stores in the north of England, offers an array of lagers, ciders, wines and spirits as well as snacks and groceries sold on promotion. With an opportunity to expand in the south of England, Bargain Booze is among those budget retailers such as Poundland, Aldi, Lidl and Primark, owned by Associated British Foods (ABI), which have thrived throughout the economic downturn.
Headed up by chief executive officer Diana Hunter, who joined from John Lewis Partnership-owned Waitrose earlier this year, Conviviality Retail also represents a play on convenience. Cash-strapped consumers are seeking to waste less food and cut fuel bills in austere times, which is driving the trend towards local top-up shopping.
Convenience is proving a key source of growth for grocery multiples including Tesco (TSCO), Sainsbury's (SBRY) and online and convenience laggard Morrisons (MRW), which has boosted its convenience pipeline through acquisition. In addition, the wider convenience sector is finding new ways to lure cost-conscious, often time-poor shoppers through handy bill paying and highly-convenient delivery collection services.
Conviviality Retail reckons it can hold its own against the cheap booze sold by the major supermarkets, drawing strength from its deeper product range. That said, while convenience is thriving, investors will be mindful off-licences have had a rough time of it during the downturn with Wine Rack, Oddbins and Threshers all going into administration.
No details of shareholdings post-float are provided in today's notice to join Aim. However press reports suggest the float will leave the company debt-free and enable ECI, the private equity player with a 75.24% stake, to make a turn on its investment.
If Conviviality Retail, being shepherded to market by joint brokers Oriel Securities and nominated adviser Zeus Capital, can profit from positive convenience and value trends, investors could be popping the corks in celebration before too long.