Oddbins is growing accustomed to controversy, high-profile departures and predictions of its demise but the resignation of sales director Andy Gadsby has brought together all three at once.

Gadsby, the loyal squadron leader with a passionate belief in his mission, had been an institution at Oddbins: a straight-talking guy with unswerving commitment to the cause who expected the same of those around him. That he, of all people, should throw in the towel prompted an almost audible collective gasp in the drinks trade.

"I'm the sales director so my job is to be responsible for the developing the sales, motivating the sales team, directing strategy," he says. "I just felt increasingly I wasn't being allowed to do that and I didn't want to start 2008 not believing in what I could do and not doing justice to the job."

Gadsby describes his resignation in careful, measured tones. He insists his love of the company remains undiminished and he even expresses admiration for MD Fabrice Bidault. But he feels he has been bypassed by Castel, Oddbins' parent company, and put in a position where he was executing orders he felt were damaging not only his ability to do the job but the viability of Oddbins itself.

The central controversy at Oddbins - aside from Castel's overpayment for the business and the losses it has sustained ever since - has been the conversion of many Oddbins branches to Nicolas, the French wine specialist chain, which now has 80 stores. The policy has meant the rebranding of some of Oddbins' best branches - including jewels in the crown such as Canary Wharf, Bath, Winchester and Alderley Edge. After some heated discussions at the Wimbledon head office, it was Gadsby's job to explain the project to an increasingly disillusioned set of managers across the country.

"I didn't mind changing unprofitable stores into Nicolas if it meant we kept shops open," Gadsby says. "In certain locations a classic French wine store might be better, but it went beyond what I was initially told. There are still 160 or 170 Oddbins stores out there to develop. I don't have any problem with the Nicolas brand but I thought it was a bit short-sighted with the last 20 conversions. Why spend £20k on a refit?"

Gadsby says his frustration was compounded by pressure to cut costs rather than invest in the brand. "Oddbins has lost a lot of money so obviously things have to change, but the attitude needs to be 'how do we develop sales and make things better?', not just cut back," he insists. "I have no animosity towards Oddbins but it wasn't exciting any more. For me it was always about developing new things, the trade side of the business, the mail order service and the range. All these things Oddbins was respected for are being lost."

Where does Gadsby's departure leave Oddbins? As a private, family-owned company Castel normally weathers these kinds of storm. "The reality is it's death by a thousand cuts and he's just said 'enough is enough'," says one analyst. "It's getting worse by the day. God knows what their Christmas trading was like.

"Is it going to change significantly with Andy going? No. Is it going to continue to drift? Yes. Is there an end game in sight? Well, it looks as if any potential sale to Thresher - long rumoured to be on the cards - seems to have stalled. Pierre Castel knows this is the worst deal he ever did."

Even if the company had only paid £40m and not the final £17m instalment due, it has still been losing money and Oddbins is "hugely unattractive" to a trade buyer, he says, adding: "An £8.7m loss was the final straw for the venture capital people looking at it. The brand equity is declining by the day. Oddbins is 'stuck'."

Gadsby believes Oddbins has to consider a more varied offering. "The mistake Oddbins made for a long time was trying to fit one format into every store," he says. "My argument was it was about ranging and promotions . You need to split this up. High-street stores should concentrate on one and two-bottle deals, larger city-type stores with car parking on case sales, and convenience ones may have to sell cheaper wine and Lambert & Butler."

For Gadsby it's all academic now. "I've taken it as far as I can take it under my tenure. I would love to see a successful Oddbins, and I hope it is," he says. "But just how, given everything that's gone on, is difficult to fathom because what's the direction?"

It is a question that will dominate the thoughts not just of Gadsby's successor but those of bosses at Thresher and Wine Rack too.nFrench gloom?

When Castel took over Oddbins in 2002 it had fewer than 20 outlets of Nicolas - its French wine specialist - in the UK

Since then Castel has converted more than 60 Oddbins stores into Nicolas outlets

Yet French wine appears to be in decline - Nielsen statistics for the year to 1 December 2007 show French wine's MAT value share of the UK market was 17.2%, down from 17.7% in 2006

France is number two in the market behind Australia with 24.2% but US wine is at 16.3%

and rising