Subscriber login Close [x]
remember me
You are not logged in.

Naked Wines profits warning sparks shares nosedive

Published:  24 June, 2022

Online retailer Naked Wines has lost nearly 40% of its market value after it admitted that lockdown-boosted sales and heightened customer acquisition is likely to see a significant drop in 2023.

In yesterday’s 2022 results announcement, chief executive Nick Devlin said the business had “fallen short” of its goal to convert new customers into loyal members of its ‘Angels’ subscription model.

The online wine seller warned sales could fall by up to 4% in the year to March 2023, meaning it would only break even in terms of profits. In a sobering update, Devlin said there were elements of the situation where “we could have done better”.

“It is clearly a tough time for consumers who are faced with rising cost of living”, he said, adding that the company wouldn’t pursue growth “at any cost”.

Naked Wines benefited from an increase in wine purchases during Covid’s successive lockdowns.

Since then however, ‘greater uncertainty’ in the economy and ‘volatile’ consumer sentiment has had a significant impact, as countries emerge from lockdown and begin to feel the pinch from inflation.

Analysts have suggested that the fall is due to “poor customer acquisition” over the past 12 months, with a higher proportion of shoppers taking the introductory offer before cancelling their memberships.

Naked Wines was founded in 2008 by Rowan Gormley, before being acquired by Majestic Wine in 2015. The subsequent partnership, which combined retail and online shopping channels, only lasted three years however, when Majestic was sold to US-based private equity firm, Fortress and Naked remained a publicly owned company under Devlin, the company’s former chief operating officer.

Devlin also tried to hit a positive note in yesterday’s announcement. “Enjoying a good bottle of wine at home, for a reasonable price for lots of people is a great affordable treat and we believe that will continue to be something millions of Brits are looking for,” he said.




Keywords: