Naked Wines owner Majestic toasts turnaround plans after best-ever Christmas
- Credit: PA
Majestic Wine has toasted its best ever Christmas trading figures as boss Rowan Gormley presses ahead with a transformation plan following a difficult six months.
The warehouse wine retailer, which owns Norwich-based Naked Wines and Suffolk-based fine wines business Lay & Wheeler, said like-for-like sales rose 7.5% in the 10 weeks to January 2, an increase on the 7.3% increase it recorded last year.
Total sales were up 12.4% during the period, with Majestic saying it is on track to meet full year expectations.
Mr Gormley said: 'Delivering strong like for likes in a tough market is a tribute to the hard work that our people put in – right across the business.
'It is also particularly pleasing that both Naked Wines and Majestic Commercial traded in line with expectations and Lay & Wheeler has maintained its strong growth.
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'Our transformation plan is working and we remain on track to achieve our £500 million sales goal. We said that we would be better prepared for Christmas than ever – and the numbers show that we did what we said we would do.
'At this stage we are not predicting a change to long-term margin expectations, but we need to retain flexibility to compete in a competitive market.'
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Around 30% of the company's annual trade is done in the lucrative 10-week Christmas period, it said.
Business divisions, year-on-year change at constant exchange rates
• Majestic Retail +6.2%
• Majestic Retail like-for-like (excluding new stores) +7.5%
• Majestic Commercial -0.8%
• Naked Wines +29.9%
• Lay & Wheeler +62.3%
• Group total +12.4%
Majestic Wine swung into the red in November, racking up half-year losses of £4.4 million, but said it was at a 'tipping point' in its return to profit growth.
The company has embarked on a three-year turnaround plan aimed at expanding and retaining its customer base, slowing down branch network expansion, and acquiring new customers for Naked Wines.
Wayne Brown, analyst at Liberum, said: 'A very strong update from Majestic Wine has provided us with confidence to leave forecasts unchanged. The shares have relatively underperformed the wider sector by 27.4% the last six months, reflecting the markets rather pessimistic view on full year outturn. Today's update should now help quell these concerns.'