EXCLUSIVE: Bestway debt deals rescue Bargain Booze retailers

Bestway debt deals rescue Bargain Booze retailers
News RN Bestway
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Bargain Booze franchisees have claimed many were “saved” from bankruptcy by Bestway after the wholesaler helped them clear up to £34m of debts owed to defunct wholesaler Conviviality.

Following its collapse, Bestway bought Conviviality’s retail assets, but not its debts to banks and suppliers.

As part of the deal, Bestway agreed to use millions owed by Bargain Booze franchisees to Conviviality and its administrators PwC to pay off the wholesaler’s debts to banks and suppliers.

However, the franchisees had themselves lost at least £9m in shares as part of the Conviviality collapse, and postcollapse supply shortages left many of the 350 franchisees unable to pay their full debts.

Just after the collapse, one store owner told RN: “At the moment it’s just about survival.”

The 20 worst-affected franchisees owed PwC an average of £845,000 each.

While Bestway was contractually obligated to help PwC reclaim the funds from the franchisees, the wholesaler successfully negotiated to wipe off significant amounts of each retailer’s debts.

A Bargain Booze retailer told RN many franchisees would have gone out of business without Bestway’s assistance. “Bestway saved our businesses and we’ve come out of the whole process fine.”

Another who also had a share of their debt wiped out added: “We are much better off now than we were a year ago under Conviviality.”

Bestway Wholesale managing director Dawood Pervez told RN: “Following Conviviality’s collapse and the subsequent acquisition by Bestway Wholesale, we worked with many of our franchisees and PwC to facilitate payment of historic trade debt owed to the banks over several months. “

This enabled the franchisees to focus on trading and better manage their cash-flow during this difficult period.”

While industry sources told RN the majority of franchisees have cleared their debts, they claimed there are some retailers who are being taken to court by PwC over outstanding arrears.

Read similar: Bargain Booze stores get boost from Bestway deal

By Alex Yau Avatar
By Alex Yau 24 Dec, 2018

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