(Photo: Pimm's)
On Thursday, Sky News reported that spirits giant Diageo has abandoned its attempt to sell the popular gin liqueur brand, Pimm's, to a third party. The liqueur was one of several slated for auction as the British firm faces pressure from investors over declining sales.
Rothschild bankers were brought onto the team in February to help find buyers for Pimm's, fruit-flavored liqueur Safari and Venezuelan rum brand Pampero. The others were easy enough; Safari was acquired by Portuguese company Casa Redondo in July, followed by the sale of Pampero to Gruppo Montenegro just a week later.
Why Pimm's was unable to find a new home remains unclear; Sky News simply reported that Diageo failed to reach an agreement with bidders.
The brand was founded in 1840 by James Pimm. Designed for use in a specialty cocktail at his oyster restaurant, Pimm's was conceived with a secret blend of dry gin, fruit juice, spices and quinine, a chemical which — unrelatedly — is commonly used to treat malaria. The recipe is a fan favorite across the UK, reportedly spotted in the hands of Queen Elizabeth II on balmy afternoons at Buckingham Palace.
Despite (or perhaps because) of its historical significance, the brand is consumed almost exclusively within Britain, where it generates around $100 million per year for Diageo. Guinness, the company's flagship beer, grosses over $2 billion.
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Diageo owns a wide roster of internationally-facing spirits including Johnnie Walker, Captain Morgan, Don Julio, Casamigos and Tanqueray. As of late, however, the numbers on its blockbuster portfolio haven't been adding up.
The conglomerate reported a dour $158 million sales decline at the beginning of the year, leading to investor panic as its stock price slumped toward the summer. Though other heavy hitters like Pernod Ricard and Remy Cointreau have faced similar difficulties, Diageo has by far netted the most coverage. Rumors of a company-wide acquisition swirled in July after AJ Bell described it as an ideal "takeover target for an opportunistic rival."
The company has nonetheless maintained steam with a string of releases and the acquisition of Ritual Zero-Proof, America's largest nonalcoholic spirits brand.
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