Majestic Wine sells brand and stores for £95m to focus on Naked Wines
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High street retailer Majestic Wine is set to sell all its stores as well as its brand for £95m as it transitions into an online-only company.
US private equity firm Fortress is buying the outlets, securing 1,000 jobs as it committed to keeping the 200-store network, which had a turnover of £300m last year.
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“Majestic has grown through periods of dramatic change, I know we have the recipe to do it again,” said a Fortress spokesperson.
“We want to keep investing in our stores, in our people and our product – everything you can feel, touch and sip. After all, you cannot taste wine online.”
Majestic managing director Joshua Lincoln added that he had received “thousands” of emails from concerned customers when the retailer looked like it may close stores in March.
He told City A.M. that Majestic Wine took the decision to de-merge the firms to avoid moving online at the expense of its core retail proposition.
“The resources financially and in terms of brain power to drive both of those as hard as possible, someone’s always got to suffer and we have to take a certain decision,” he said.
“But when you separate you are able to put your foot firmly on the accelerator pedal.”
With fresh investment from Fortress, Lincoln said Majestic Wine can improve its in-store experience with personalisation, such as a service called Wineify, currently in the works.
“Wine is an experience and you can’t do it just online,” he said. “Shoppers want to know what their taste buds say or they want recommendations from someone who knows what they like. Majestic is in a key position to offer that.”
The stores are also likely to get a facelift. “They won’t look like warehouses anymore,” Lincoln said, “they will look more like storerooms.”
Majestic Wine plc – the owner of Majestic Wine until the deal goes through – will rebrand itself solely as Naked Wines, which it bought in 2015.
Money from the sale of the Majestic brand and its stores will be used to cut debt and invest in Naked.
A separate sale of a freehold property to a separate third party buyer will bring Majestic’s full retail proceeds up to £100m.
“I am delighted that we have managed to secure an independent future for both Naked and Majestic Retail and Commercial, allowing both companies to pursue growth by focusing on their unique propositions,” Majestic chief executive Rowan Gormley said.
Major Majestic shareholder Gatemore Capital Management, which bought a stake in early 2019, welcomed the sale.
“Having worked closely with the board and management to ensure shareholder value is maximised, we are excited for the company’s prospects going forward as a standalone, high-growth and profitable business,” managing partner Liad Meidar said.
The investor had pushed for any sale to divide Majestic and Naked, believing the two would perform better independently of one another.
Gatemore also has a 3.8 per cent stake in Naked Wines.
Majestic said it had received multple bids in June as it pushed to sell off its store network to focus on Naked Wines.
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At the time it said Naked had “a greater potential for growth”.
Activist investor Elliott and private equity firm Opcapita were also reportedly in the running to acquire Majestic’s bricks-and-mortar business.
Main image credit: Majestic Wine