Michael Mulligan comments on Conviviality administration
Michael Mulligan, partner and insolvency specialist at law firm, Shakespeare Martineau, said:
“Matthew Clark and Bibendum have been offered a reprieve but Conviviality is not out of the woods yet. Whilst a deal is on the cards, the business is still teetering on the brink of administration.
“Conviviality’s retail operations, Bargain Booze and Wine Rack, may not be attractive propositions for buyers. Consumer spending is dropping and high street retailers are coming under increasing pressure from restrictive rents and rates. There is sure to be some interest, but at what price for unsecured creditors?”
“This latest high-profile collapse signifies the fragile state of the UK’s retail and hospitality and leisure sectors. All businesses should be taking precautions and putting contingency plans in place to protect their operations, should the worst happen.
“Suppliers in any sector should take lessons from this and review key contracts as soon as possible, particularly if large amounts of stock are held offsite by customers. This includes making sure key clauses, such as ‘retention of title’, are valid, seeking legal advice where appropriate and ensuring that there is a plan in place for what to do in a worst-case scenario.”