Yahoo Finance Conviviality boss Diana Hunter falls on her sword after double profit warnings
Diana Hunter, the boss of Bargain Booze owner Conviviality, has resigned after the company issued two profit warnings and revealed it would have to tap investors for more cash after an unexpected tax bill.
Ms Hunter was stepping down from the board with immediate effect but would stay on “for a period of time in order to provide transition support”, Conviviality said.
Non-exec chairman David Adams, the former finance director of House of Fraser, will step up to become executive chairman in the interim.
Conviviality added that it was “continuing to engage with stakeholders” and would provide an update in due course.
The retail and wholesale chain ran into trouble earlier this month when it warned that its earnings before interest, tax, depreciation and amortisation would be around 20pc lower than expected because of an “arithmetic error” in its forecasts, as well as tougher trading and tighter margins.
Having lost £300m from their value the shares were then suspended last week when the company admitted an unforeseen tax demand of £30m would reduce earnings even further, though it declined to say by how much.
Conviviality said last week it was in talks with its advisors and broker "regarding the possibility of an equity fundraise to effect a recapitalisation of the business", thought to be in the region of £150m.
The company, which also scrapped its dividend to save £8.2m, is also in talks with lenders and suppliers.
Ms Hunter’s resignation completes a fall from grace for the former Waitrose and Sainsbury's executive, who took the reins at Conviviality in 2013 and steered it through a floatation on London’s junior Aim market that year.
The chief executive, who told the Telegraph last year she was "quite a pacey person", led the company through break-neck expansion, buying up the Wine Rack chain, a host of convenience stores, an outdoor bar operator and wine specialist Bibendum, as she pushed Conviviality towards being a "one stop shop" for the drinks industry.
Her biggest deal was the £200m takeover of larger drinks wholesaler Matthew Clark, giving Conviviality a foothold in the "on-trade" sector of pubs and restaurants.
By the middle of last year Conviviality was supplying an estimated 17,000 outlets and 600,000 customers, but without additional funding it is feared it may have to go into administration, threatening 2,600 jobs across 700 stores.
It was reported by Sky News that Ms Hunter’s resignation was a precondition of its lenders and shareholders before advancing it more money.
