Vagabond Wines, which has the majority of its sites in London, owed more than £10m as it collapsed into administration ahead of being rescued by Majestic Wine, it has been revealed.
The company, which was established in 2009 by Stephen Finch in order to offer customers a new way of buying wine, has sites across the capital as well as one in Birmingham. Finch resigned as a director in January 2024.
The business carried out its first funding round in 2018 and raised around £4m while a number of other rounds took place between 2020 and 2022 netting almost £2m.
Vagabond Wines appointed Quantum Advisory to oversee the administration process in March ahead of its rescue.
Vagabond Wines’ 12 sites are located in:
Fulham
Charlotte Street, London
Northcote Road, London
Victoria
Battersea Power Station
Paddington
Canary Wharf
Monument
Shoreditch
Gatwick – Kitchen & Bar
Gatwick – South Downs
Birmingham
Now, a newly-filed document with Companies House by Quantum Advisory has set out how Vagabond Wines entered administration and how much it owed to its creditors.
How did Vagabond Wines collapse into administration?
In its document, Quantum Advisory said: “The company’s financial difficulties started as a result of the Covid-19 pandemic and the associated enforced closure of all sites.
“Turnover fell by 64 per cent in the year ending March 2021 when compared to the prior year and as a result the business fell into arrears with HMRC and other suppliers.
“In addition, the company was required to service its legacy borrowing but also under the terms of the share issue the business was required to make payments to its investors.”
Vagabond Wines posted a turnover of £7.4m in the year to March 2022 and £16m in the next 12 months.
In the nine months to November 30, 2023, the company’s turnover stood at £18.1m.
However, Quantum Advisory said that it “continued to face difficulties with cash flow in view of its historic liabilities”.
Part of the reason why Vagabond Wines’ sales increased was the opening of a new site at Heathrow Airport in May 2022. That location generated sales of £5m and a net profit of £444,000.
As a result of the success of the Heathrow site, the business opened two more locations at Gatwick Airport in May 2023.
However, Quantum Advisory said they did not generate the same level of return as Heathrow.
The Heathrow site was also forced to close for an extended period in late 2023 and while the landlord made a capital contribution to Vagabond Wines as compensation, the loss of trade “resulted in the business being unable to service its obligations”.
Vagabond Wines sold to Majestic Wine
Quantum Advisory sold the business and assets of Vagabond Wines to Winery Limited, a company controlled by Majestic Wine, on April 5, 2024, for a £6.5m.
As part of the deal, the buyer agreed to take on certain liabilities of Vagabond Wines “which will further improve the position for the company’s creditors”.
The acquisition also included all of Vagabond Wines’ employees apart from those based at Gatwick Airport.
Those two sites are still up for sale and the jobs could be lost if a deal is not reached.
Majestic Wine itself is owned by Fortress Investment Group.
How much did Vagabond Wines owe to its creditors?
According to the document filed by Quantum Advisory, Vagabond Wine has a total deficiency of more than £10.5m.
Its creditors include British Land, Coutts, HMRC, Savills and Thames Water.
Quantum Advisory said that it is anticipated that there will be sufficient funds to pay a distribution to preferential and secondary preferential creditors in full.
It added that a distribution would also be made to unsecured creditors.