Naked Wines admits ‘mistakes’ as retailer sets out shake up
Naked Wines has announced a shake up of the business in a bid to cut costs,including 30 redundancies.
The wine retailer, which enjoyed booming sales in the pandemic, said it had “made mistakes” while pursuing “rapid growth.”
Low consumer confidence and high levels of supply chain inflation had resulted in an underwhelming performance for the London-listed firm in recent months.
Last year, the company stocked up on inventory and added to its cost base “in anticipation of sustained faster growth which has not been delivered,” chief executive Nick Devlin said.
Chairman Darryl Rawlings has stepped down effective immediately as Devlin said operational changes at the firm had “been hard, but it has been necessary.”
Rawlings is to also step down as a member of the board at the end of the month, with David Stead stepping into his shoes as chairman immediately.
The company has negotiated its banking facilities onto a “sustainable long term basis” as it pledged to reset its cost base and slash future stock commitments.
Some teams at the company had been restructured “to create a leaner and more focused organisation”, resulting in the loss of six per cent of the retailer’s workforce.
Naked Wines is to also slash marketing investment as it was “not delivering satisfactory returns”, the operational update set out.
In the short term, the company forecast its sales and active consumers would drop due to the shift to focusing on profits over growth.
It also set out one-off costs of up to £12m to slash inventory and in general and administrative costs.
In June, Naked Wines issued a stark warning for shareholders, estimating that sales could plunge by as much as four per cent in the year to the end of March.
Shares in the Norwich based company had swelled 26 per cent in late morning trading on Thursday.
In a note to investors, Liberum dubbed the strategic review as “sensible”, with analysts giving the plan a vote of confidence.