Sales up at wine seller as customers venture off the beaten track
PUBLISHED: 11:29 14 June 2018 | UPDATED: 12:07 14 June 2018
Guy Bell/Majestic Wine
The Royal Wedding and drinkers' experimental tastes have helped drive sales at a wine retailer but the group has warned the bubble might burst with difficult times ahead.
Majestic Wine has swung to an £8.3m profit in its full-year results for the 12 months to April 2, compared to a £1.5m loss for the year before.
The company was boosted by the performance of Norwich-based Naked Wines, its online division, which saw an 11.3% rise in turnover as it continued to grow across the US and Australian markets.
The group also includes Colchester-based Lay and Wheeler which sold 810 bottles of a wine in less than two hours after it was served at the Royal Wedding.
Having sold 2,790 bottles of 2016 Les Setilles Bourgone Blanc between July 2017 and January 2018 the firm offered it again on May 28 as saw its remaining stock snapped up.
Despite the positives chief executive Rowan Gormley said trading had worsened since the year-end.
He said: “We expect the UK market to remain tough, possibly even tougher than last year.
“Certainly trading since year-end has been harder than the prior year in the UK.”
The group still expects to see its retail arm continue to grow sales and profits in spite of the challenging conditions.
It hopes to weather the storm by an ongoing cost-cutting drive, paying down debts and focusing on growing online without opening new stores, while also expanding outside of the UK.
Mr Gormley said: “If the UK is headed for a retail crisis, as some commentators are suggesting, then we are planning for a great crisis.
“We founded Naked Wines during the financial crisis of 2008 and proved that investing in acquiring customers and generating loyalty through great products and service, will drive profitable growth even in a tough market.”
Naked has invested £14m in customer acquisition during the year and intends to pump in a further £9m to £12m in 2019.
It has seen sales of Hungarian wine increase six-fold while Bulgarian wines have been up 22% as customers ventured off the beaten track.
The group said like many businesses retail trading worsened towards the end of the year, with a boost from the timing of Easter masking otherwise more difficult conditions.
However Naked’s online offering delivered an 8.1% rise in sales – up 11.3% on an underlying basis.