Naked Wines posts £10.7m losses - but still celebrates
- Credit: Archant
Global online wine retailer Naked Wines, based in Norwich, has said new investment is the reason for a pre-tax annual loss of £10.7m.
The firm, in Chapelfield Road, said it had been one of the few winners during the pandemic - reporting a surge in customers and sales in the US.
With pubs and bars shut for most of the year, the firm reported a 68pc increase in annual sales to £340.2m. It also saw a 53pc rise in customer numbers in the year to March.
But it comes after a £50m investment in new customers compared to £23.5m last year. As a result, it posted a pre-tax annual loss.
“It is clear to us that the pandemic has served to underscore the value of our business model in connecting winemakers and consumers directly and proven the opportunity before us,” group chief executive Nick Devlin said.
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The retailer is now targeting sales of between £355m and £375m, while investing between £40m and £50m in new customers. The company is now the largest firm distributing direct to consumer wine merchants in the US.
Last year in lockdown the firm saw revenue up 81pc for April and May after so much demand for deliveries it had to pause orders.
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But some fear its subscription model - whereby people sign up to order wine on a monthly basis - may be affected as the Covid pandemic continues.
James Andrews, personal finance expert at money.co.uk, said: “Naked Wines has seen a slump in profits as a result of the Covid pandemic, with many consumers reconsidering whether wine subscriptions are an affordable option in the wake of a financially difficult period.
"With the recent news of its share price increases, this slump will come as disappointing for shareholders who are yet to see the company turn a profit.
"Whilst Naked Wines benefited from the closure of the hospitality industry, and some consumers choosing to opt for a more luxury wine subscription service, it’s still not clear whether this will be enough to increase the company’s profitability despite rising share prices."
Naked Wines was acquired by retailer Majestic Wine for £70m in 2015, but was split off from the business last year. Majestic in turn was sold to a US firm last December.