Ditton Wine Traders’ fine wine blog

Only on the 21st of February I predicted in this blog that a wine merchant or two might go under. Twenty days later and we're there. Although not folding, proudly family owned and highly specialized Fine Wine merchant Lay & Wheeler has been sold to Majestic.

Having been independent for 150 years, L&W had already sold their bonded warehouse Vinotheque to London City Bond. They now have taken the step to sell the remaining business to high street retailer Majestic. They are snapping up this great business for GBP 6m. With a net profit of GBP 0.5m,  they pay a hefty 10 times net profit, no doubt reflecting the excellent fit into their existing business of an odd 150 retail outlets. Talking about inflation though....

This follows the sale at the end of last year of the majority of shares of Armit – another resounding name of the UK wine establishment – to Dutch wine group Baarsma. Baarsma started off in the bulk wine business and, under new CEO Hans van Duin (ex Ahold and Heineken), is very ambitious and growing fast. To complement their range at the top end, Armit will be a very welcome addition, having the exclusive agencies for Lafleur, Sassicaia, Angelo Gaja, Bruno Giacosa and Tenuta dell’Ornellaia amongst others.

Time will tell who's got it right. Have Armit and L&W sold at the peak of the market, cashing in nicely? Or have the big fish gobbled up some highly priced, hardly ever available snacks that will turn out to be transforming their future?  Maybe both, but I tend towards the latter – it's not very often that a (although highly successful but in the end) mainstream business can acquire such gems. Having worked for a high street retailer myself, I know the Holy Grail of retailing is trading up your customers. As these acquisitions throw in a totally new, very high end customer base, I'd have done exactly the same (if I'd have had GBP 6m).