Major wine conglomerate files for bankruptcy
Natalie Hanson
SANTA ROSA, Calif. (CN) — One of America’s largest wine conglomerates announced Wednesday that it has filed for bankruptcy, during a turbulent time for the wine industry.
The Santa Rosa-based Vintage Wine Estates, which went public in 2020, also announced its intention to voluntarily delist from the stock market. The company also said that it completed a sale of its Cosentino Winery to Gene Wines, a California limited liability company, for proceeds of $10.5 million to help pay down its debt.
Vintage, the parent company of popular California wineries like B.R. Cohn, Girard and Viansa, said filing for Chapter 11 bankruptcy was the best option for its recent financial challenges.
The company said in January that it was restructuring to monetize its assets while exiting from lower-margin product and service offerings. It cut its total workforce by approximately 15% to save about $7 million annually.
“The complexity of our business has resulted in a disproportionately high-cost base,” Seth Kaufman, president and CEO, said in the January statement. “To drive margin improvement and generate cash we need to simplify beyond our product offerings and fundamentally reconstruct our business model. Getting from here to there starts by recognizing where our strengths lie and identifying the areas of the business in which we shouldn’t operate.”
Vintage did not immediately respond to requests for comment.
The Chapter 11 filing allows Vintage to try to sell off its assets in order to address its debt obligations. The company says that it expects all commercial operations to continue as usual.
If the bankruptcy court approves, Vintage can enter into a debtor-in possession financing facility so lenders can make available $60.5 million. It holds an aggregate of approximately $310 million in outstanding loans and commitments.
Following its stock market delisting, Vintage will file with the Securities and Exchange Commission by August 15.
The company, open since 2009, owns 30 wine and spirits brands, including Ace Cider and California wine estates like Clos Pegase, Kunde and Qupe. It has been the 15th largest wine producer in America, according to Wine Business, producing two million cases per year.
But it has displayed signs of decline for months. In 2022, Vintage’s stock fell 40% due to inventory issues. In 2023, its share value dropped under $1 and ended up below 20 cents by June 2024. There were several layoffs at the company, which cut its workforce by 7% in 2023 and another 15% in January.
Vintage earlier this year announced a deal with one of its lenders to postpone its loan payments until June and defer a $10 million principal payment by a month.
Amid what some have said is a global wine crisis, reports have indicated that wine and grape supply have outpaced demand, possibly creating a global downturn in the wine industry.
Other wineries — such as Robert Mondavi Winery of the Central Coast’s famed Chalone and Zinfandel pioneer Ravenswood Winery — have failed after going public. The founder of two Sonoma County wineries also recently bought back his companies following failures on the stock market.