Naked Wines US sales overtakes UK as Majestic eyes international growth
Sales at Naked Wines US have overtaken the UK business for the first time, parent company Majestic Wine has revealed, as it vows to ramp up investment in the US to grow its international business.
Figures from UK wine retailer Majestic Wine out this morning showed revenue growth in the North American division had grown ahead of its UK counterpart for the first time, on the back of increased investment and a “calibrated” offer.
Group chief financial officer James Crawford confirmed to db that US growth had risen by 19.3% and now makes up around half of the total Naked business, contributing around 15% of sales to the wider Majestic Group.
“We see the US in particular as the growth driver of the Naked business and therefore in time of the group and when we look at addressable markets, the US has a market around eight times the size of the UK that we can invest into and with very attractive economics as well.”
“We do see it [international sales] it as an increasingly important part of the group.”
This also helped drive the Group’s online business, which now accounts for around 45% of sales.
Investment in Naked Wine US rose nearly 125% last year, compared to 60.6% investment in Naked overall, and more was planned.
“The US is exciting,” Group Chief Executive Rowan Gormley said, “Wine sales are growing, direct to consumer wine sales are growing even quicker and we have a business model with attractive margins.
“In the first half, we added around £31.6m of future value to Naked by investing £7.9m in acquiring new customers that we expect to deliver a forecast lifetime payback of 4x. Within this we increased our investment in the US in particular and are seeing payback in line with our expectations from this. Revenue across both both grew 14% overall, compared from 11.6% last year and 61% growth in new customer investment.
The investment included altering the offer for the US, investing in marketing to drive more traffic to the website, and decreased investment in subsidising customers’ first orders to boost new customer gross margins and attract a “higher” quality of customers.
“We said we would increase investment in new customers in Naked by £5m to £8m this year. We now expect investment to be at least £6m higher this year than a year ago and we continue to find further investment opportunities.”
Parent company Majestic is keen growing its international business, which currently accounts for around 20% of group revenue.