Thursday, 13 May 2010
The London Wine Shop: a good investment but for whom?
I have news of a portfolio of wines being offered by the London Wine Shop Ltd to NM. This investor is being offered five cases: 2003 Lafite (£13650), 2006 Lafite (£7150), 2004 Latour (£4400), 2002 Mouton-Rothschild (£3800) and 2005 Mouton-Rothschild (£7550). This makes a total of £36,550.
Certainly a good deal for someone but this may be The London Wine Shop rather than NM. For if NM consulted wine-searcher today it would be clear that by shopping around they could strip a cool 38.27% from The London Wine Shop's proposal.
Here is how: 2003 Lafite (£9800 – L'Assemblage), 2006 Lafite (£5950 – Richard Kihl), 2004 Latour (£3159 Fine & Rare), 2002 Mouton-Rothschild (£2525 Justerini & Brooks) and 2005 Mouton-Rothschild (£5000 Woodland Wine). This makes a total of £26,434.
I understand that NM was cold called by The London Wine Shop Ltd. Doubtless they would have explained to NM that because their prices are so high they were proposing a very long term investment. Furthermore should he choose to shop around he could save himself £10,116. I assume that The London Wine Shop Ltd would also have explained to NM that in order for the portfolio to start making money in the real market, his wines would have to increase by 53.63% to take into account commission on the sale. I'm assuming a low commission of 10%. Then, of course, there are storage charges, although given the prices of First Growths these days they won't make a significant difference to the sums.
The London Wine Shop Ltd
The company was founded on 4th August 2009 and its registered office and given trading address is Berkeley Square House, Berkeley Square, London W1J 6BD. investdrinks understands that their registered office is on the second floor. This is one of the serviced offices run by Regus. Sonny Soper is the company's director. The London Wine Shop Ltd is due to file its first accounts on 4th May 2011. The company appears not to have a website.
The attractions of this deal for The London Wine Shop are fairly clear. If I was NM, however, I would find the attractions considerably less compelling. If Mr Sonny Soper would like to make the case for NM paying 38% more for his portfolio if it is bought through The London Wine Shop, I will be happy to post his explanation.