The chain has been purchased by the son of its former boss. So does he have what it takes? By Andrew Catchpole.
The tumultuous business of high-street wine retail has taken another dramatic and highly unexpected turn with the purchase of Oddbins by Simon Baile – the son of Nick Baile, who saved the company from the receivers 35 years ago.
No details of the purchase have been leaked, but after six years of loss-making under French winemaking giant Castel, Baile is likely to have paid a lot less than the £57m Castel was rumoured to have stumped up in 2002.
So why did it go so wrong for Oddbins under Castel? And what does Baile have to do to emulate the success of his father?
Back in 2002, the acquisition was part of Castel’s ambitious push into the UK. But the company quickly lost confidence in the Oddbins brand, shrinking its estate from 246 stores to 158 as sites were cherrypicked to become Castel-owned Nicolas stores.
Meanwhile, the remaining Oddbins lost their reputation for idiosyncratic and good-value wines as Castel’s French wines flooded the shelves and Castel, remaining secretive about its aims, further alienated consumers from the once-iconic and offbeat brand.
A source close to Baile reveals he had originally approached Castel to see if he could buy a few outlets, and was surprised to be offered the whole chain. For its part, Castel was happy to sell the business on as it “would allow Nicolas and Oddbins to pursue their own agendas”, says Eudes Morgan, Castel’s former managing director.
Baile’s track record certainly suggests he could be the right man for the job as far as Oddbins is concerned. He currently runs the small-scale retail and wine club operation Ex Cellar with business partner and brother-in-law Henry Young. With two branches in Ashtead and Paris, it focuses on independent family-produced wines of the type that Oddbins originally built its reputation on. For now, the Ex Cellar business will remain separate from Oddbins, but there is “no guarantee” that will remain the case in the future.
Baile is confident he will be able to restore Oddbins to its former glory. “This is an exciting opportunity,” he says. “Our retail background and my knowledge of what made Oddbins great will help drive passion and innovation back into this business. It comes back to basic retailing skills.”
It will be a tough task, though.One competitor says the whole of the high street is suffering, with multiple specialists’ share of the wine market down from 12.4% to 10.2% in the past year alone.
Trying to translate the Oddbins of his father’s day, with its anarchic Ralph Steadman cartoons, freewheeling staff and steady line of ‘odd’ bin-end wines, may not be so easy in today’s retail environment, add other experts. Growth in wine consumption has reached a plateau, with the average retail price per bottle hovering around £4.10, and fierce discounting shaping a market that is now dominated by the big supermarket retailers. To add to Baile’s challenge, the ugly prospect of recession also looms.
Rejuvenating the business will take time, says Baile. “There will be a period during which we review the current structure and develop plans for the future,” he adds.
However, he is convinced that by returning the business to its old roots, it will once again stand out from the crowd and re-engage with a new generation of customers tired of homogenous offerings.
“This is a cash-positive business with plenty of stock, great locations throughout the UK and passionate staff,” he says.
It’s an expensive and risky gamble. But if anyone can put the odd back in Oddbins, Baile can.
The tumultuous business of high-street wine retail has taken another dramatic and highly unexpected turn with the purchase of Oddbins by Simon Baile – the son of Nick Baile, who saved the company from the receivers 35 years ago.
No details of the purchase have been leaked, but after six years of loss-making under French winemaking giant Castel, Baile is likely to have paid a lot less than the £57m Castel was rumoured to have stumped up in 2002.
So why did it go so wrong for Oddbins under Castel? And what does Baile have to do to emulate the success of his father?
Back in 2002, the acquisition was part of Castel’s ambitious push into the UK. But the company quickly lost confidence in the Oddbins brand, shrinking its estate from 246 stores to 158 as sites were cherrypicked to become Castel-owned Nicolas stores.
Meanwhile, the remaining Oddbins lost their reputation for idiosyncratic and good-value wines as Castel’s French wines flooded the shelves and Castel, remaining secretive about its aims, further alienated consumers from the once-iconic and offbeat brand.
A source close to Baile reveals he had originally approached Castel to see if he could buy a few outlets, and was surprised to be offered the whole chain. For its part, Castel was happy to sell the business on as it “would allow Nicolas and Oddbins to pursue their own agendas”, says Eudes Morgan, Castel’s former managing director.
Baile’s track record certainly suggests he could be the right man for the job as far as Oddbins is concerned. He currently runs the small-scale retail and wine club operation Ex Cellar with business partner and brother-in-law Henry Young. With two branches in Ashtead and Paris, it focuses on independent family-produced wines of the type that Oddbins originally built its reputation on. For now, the Ex Cellar business will remain separate from Oddbins, but there is “no guarantee” that will remain the case in the future.
Baile is confident he will be able to restore Oddbins to its former glory. “This is an exciting opportunity,” he says. “Our retail background and my knowledge of what made Oddbins great will help drive passion and innovation back into this business. It comes back to basic retailing skills.”
It will be a tough task, though.One competitor says the whole of the high street is suffering, with multiple specialists’ share of the wine market down from 12.4% to 10.2% in the past year alone.
Trying to translate the Oddbins of his father’s day, with its anarchic Ralph Steadman cartoons, freewheeling staff and steady line of ‘odd’ bin-end wines, may not be so easy in today’s retail environment, add other experts. Growth in wine consumption has reached a plateau, with the average retail price per bottle hovering around £4.10, and fierce discounting shaping a market that is now dominated by the big supermarket retailers. To add to Baile’s challenge, the ugly prospect of recession also looms.
Rejuvenating the business will take time, says Baile. “There will be a period during which we review the current structure and develop plans for the future,” he adds.
However, he is convinced that by returning the business to its old roots, it will once again stand out from the crowd and re-engage with a new generation of customers tired of homogenous offerings.
“This is a cash-positive business with plenty of stock, great locations throughout the UK and passionate staff,” he says.
It’s an expensive and risky gamble. But if anyone can put the odd back in Oddbins, Baile can.
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