Borough Wines, which collapsed into administration at the end of May with debts of almost £1.3m, has been bought in a pre-pack sale for just under £60,000.
Administrator Mazars said there had been “no reasonable prospect of rescuing the group in its existing form as a going concern” and that the deal, secured with Borough founder Muriel Chatel and a French backer, represented a better outcome for creditors than liquidation.
The biggest chunk of debt (£779,000) was actually to Expression du Terroir Ltd, a business within the Borough group which sourced and supplied stock.
Many of Borough’s other creditors included small French wine producers, some UK brewers and distillers and a number of logistics companies. Armit was owed £4,867, Ehrmanns £4,720, Boutinot £3,058 and Sipsmith £3,652.
Mazars reported that Borough Wines, which started on a stall at Borough Market in 2002, had expanded to nine units but recently closed six sites “as a result of declining turnover and increasing losses”.
The sale of the business to Spirits of Borough, owned by Muriel Chatel and Arthur de Chalus, includes £43,760 of stock and all equipment, along with goodwill, intellectual property and customer records. The company has secured an initial three-month lease at the Stoke Newington branch.
Chatel said that rent demands had been “like a hoop around our neck”.
She added: “It’s been tough but what I would say is that at least we were extremely proactive and we took control while we could. We didn’t wait for the landlord to fold the company because we couldn’t keep up with the payments on empty shops for the next 20 years.
“We are doing everything by the book. We had to send out letters to people we work with in order to keep the trading name, to inform people that the previous company had to go into administration, but that Borough Wines was still very much trading.
“We have a French investor backing us, which requires faith in the current climate. They are an extremely serious investment company who invest in all sorts of businesses and they decided that our project was extremely strong if we managed to get out of retail and keep the strategy towards wholesale. They love the idea of the franchises and of wine on tap.”
Chatel said that relationships with some creditors had been maintained.
“We haven’t been able to write cheques left, right and centre straight away but we are trying to find solutions to maintain relationships with those who have been supportive of us for many years and will hopefully be part of the next chapter.
“In some ways what we are doing and putting together with the Borough Wines franchise is more interesting than the few shops we closed.”