The boss of Majestic Wine on Monday raised the prospect of ditching the business altogether to focus on its online arm, Naked Wines.
Chief executive Rowan Gormley, who founded Naked in 2008 and sold it to Majestic in 2015 for £70 million, laid out restructuring plans. He said: “We’re in a fortunate position of having two businesses and one is shooting the lights out. We said we’d put our investment where the best return is.
“We don’t think Majestic is a loser, it has a shot in the future but it requires time and money. We’re considering [everything from] an outright sale to selling or closing some stores.”
The move will allow the retailer to release the cash from Majestic’s retail and commercial business and pump it into Naked. It could also lead to job losses, which it hopes “to minimise” by moving them to Naked.
Majestic has 200 stores in Britain, of which around 20% are freehold. Almost 45% of its business now comes from online with a further 20% from international sales.
Shore Capital analyst Greg Lawless said that Majestic’s statement “lacks the fine detail about the magnitude, likely timeframe or potential costs of the proposed store closures”.
The retailer still expects to make sales of £500 million this year and pre-tax profits of £11 million. However, it will raise annual investment in luring shoppers to its website from £20 million to £26 million.
The group, rebranding as Naked Wines, will give details of its costly restructuring plan in June with its full-year results. The City wasn’t impressed: shares fell 33p, or 12%, to 237p.
