Begbies Traynor administrates GinFestival.com as gin bubble threatens to burst
For the best part of a decade, gin sales in the UK have been growing exponentially. However, the collapse of a firm previously riding high on that wave of consumption has suggested that the gin bubble might finally be set to burst. Begbies Traynor has been appointed to administer GinFestival.com, which encountered financial troubles having over-stretched its e-commerce platform.
2017 saw UK gin sales surpass 50 million bottles for the first time, a haul worth £1.2 billion – double that of the £600 million the hallowed elixir brought in in 2011 – and estimated to have gone toward making more than a billion gin and tonics. With such demand in Britain for gin, it is no surprise that the 21st century gin craze has led to a boom in the number of businesses centring on either distilling or selling the spirit, with a growing number of ‘gin palaces’ doing both. The trend has understandably drawn comparisons with the great wine bar bubble of the 1970s and early 80s, but, as with that case, the bubble now looks set to burst.
While the warning signs might have been on the horizon for some time, with various commentators pondering when the market would reach full saturation as early as 2014, the gin juggernaut has seemingly continued to roll on regardless, until now. The market looks considerably less secure on the news that Gin Festival Limited, a firm which had been trading as GinFestival.com, has entered administration. As a result, gin festivals across the country have been cancelled after the Keighley-based business finally collapsed following a prolonged period of financial difficulty.
GinFestival.com was established in 2013, and according to administrators from professional services firm Begbies Traynor, the event organising business encountered financial difficulties after it invested heavily in expanding its online presence. The business attempted to bring online ticket sales for its events in house, rather than outsourcing them, while also setting up an e-commerce operation to sell craft gins direct to customers, and while digital sales are often spoken of as being the salvation of consumer-based businesses, both measures actually increased the financial burden on the company, amid a consumer crunch which has seen stagnating wages and a fall in the value of the pound impact the spending power of British consumers, who have subsequently scaled back luxury spending this year.
As a result, all 27 members of staff employed by the business will be made redundant and the entire programme of 20 gin festivals planned for the coming months has been cancelled, including events in Sandown, Worcester, Liverpool, Birmingham, Lincoln, Portsmouth, London, Wakefield, St Albans, Sheffield, Oxford, Edinburgh, Leicester and most recently an event in Norwich.
Gin Festival Norwich was sold out for three out of the four planned Friday to Sunday sessions in early July, although the company’s collapse means that not only did the event fail to take place, but GinFestival.com claimed it was not in a position to reimburse ticketholders for Gin Festival Norwich in relation to advance tickets bought, which were advertised for sale at £14. To avoid similar problems, advance tickets holders elsewhere have been advised to contact their card provider as soon as possible, and to check whether they may be covered for the loss under the provider’s Chargeback system.
A number of Norwich attendees reported being unable to get any answers from the firm itself, only finding out the East Anglian event was cancelled via posts on social media. Speaking to the BBC at the time, Donna Hills, who was one such dissatisfied customer, commented, "It has not been handled well."
Despite Begbies Traynor – who recently also administered luxury pudding producer Ultimate Foods – attempting to market GinFestival.com with the aim of finding a buyer and avoid liquidation, no offers have been forthcoming and a closure administration will now take immediate effect. Julian Pitts and Nick Reed have been appointed as joint administrators.
Commenting on the situation, Pitts said, “Our aim was, of course, to find a purchaser for the business as a going concern in order to safeguard the jobs, but unfortunately, despite our efforts, this did not prove possible. We are now in the process of realising what assets we can in order to achieve the best possible returns for creditors.” He added, “The loss of jobs is always extremely disappointing and in this case approximately 20,000 tickets have also been sold for forthcoming events which will not be reimbursed as part of the administration process.”
GinFestival.com is the latest in a succession of retailers to have seen digitalisation fail to deliver a turnaround in financial health. Teen fashion store Claire’s went belly-up just months after engaging Lyons Consulting Group to help the brand emulate it’s ‘in-store experience’ with an e-commerce platform, while bricks-and-mortar retailer House of Frasier picked Capgemini to capitalise on the oncoming era of digital disruption in the retail sector, only to have to resort to a company voluntary arrangement to avoid administration, less than a year on.
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