Interview: Majestic retail boss buoyant as he promises ‘We’re here to stay’
The UK MD of Majestic and Naked Wines, Josh Lincoln has promised suppliers and consumers that the UK wine specialist is “here to stay”, even though the ink isn’t dry on the proposed sale of the retail business.
Speaking to the drinks business following the publication of its results this morning, Lincoln said the main message was that “Majestic is here to stay.”
Although he refused to be drawn on the prospective bidders or the price of the deal, which is rumoured to be around £100 million, saying that would be released at a later stage, he said the mood in the office was like Mark Twain’s much misquoted quip in that rumours of the retailer’s death had been greatly exaggerated in the press.
“It’s not all signed sealed and delivered but the direction we’re moving in is very exciting,” he said.
“The potential buyers on the table will be spending a chunk of money on [the business], the ambition is not to run it down and close the business, but to grow it, that’s why the strong statement that we’re here to stay, we’ve not lost our bottle, we’re still on the high street and we’re investing in the high street.”
“I think the UK needs a wine specialist and it’s great news that we’re still standing. There’s a lot of work to be done, the market hasn’t suddenly changed with this announcement and we need to work together with suppliers to build long-term relationships for them to win and for us to win in the long run.”
The retailer plans to further enhance its range and had recently appointed former Tesco BWS boss Rob Cooke as the new head of buying and merchandising, who will oversee this process.
“Rob’s been with us for a few months, he’s been assessing he range and things there’s a lot of opportunity to be an even better specialist, so we’re excited about that,” Lincoln told db, adding that they would have ‘an official plan’ once the sales process had been concluded.
No Naked stores
Although the group had initially talked about converting some of the estate to bricks and mortar Naked stores, Lincoln said this was not longer part of the plan, and the store that was migrated as part of a recent trial would be turned back into a Majestic store over the next few weeks.
“The plan is a complete sale of the retail and commercial as it is, so none of the stores will be Naked stores, he said.
Countering some critics that the merger had only served to allow Naked Wine to asset stripped its retail partner and that decoupling it was inevitable from the outset, Lincoln said the digital input from Naked Wines been hugely beneficial for the Majestic business.
“It’s been quite an interesting journey if you think about it. With the world moving more digital Majestic needed a lot of the injection of expertise brought over from Naked in that area, and it’s really helped. The website has been re-platformed into 30% year-on-year growth that is absolutely flying and that’s been a real advantage to doing this”
He also noted that initiative taken by the retailer in recent weeks had further boosted the viability of the retail store estates.
“From a Majestic point-of-view, we’ve spent the last 40 years, 2,000 weeks proving we can sell wine incredibly well as a specialist, and in the last six weeks we challenged the business to prove it can sell relationships with customers, through our new ‘Lock it in’ service and we’ve proven we can do that ,” he explained.
Around 12,000 customers had signed up to the newly launched no tie-in subscription ‘Lock it in’ service, he said, which offers them the option to subscribe to 12, 24 or 36 bottles over a 1, 2 or 3 month period, to gain a saving of 33% and free delivery.
Lincoln said the success of being able to sell these types of relationships had added to the viability in the stores and given the retailer confident in the strategies to want to remain on high street and invest in the store experience.
“We’ve got 20 stores over the next three moths we’ll be continuing to revamp and adding in the experience where customers can do the wine fitting based on the wine styles to find wines they love. And we’re excited to continue that journey,” he said.
Speaking about Majestic Retail’s lack of profitability, Lincoln pointed to the ‘positive’ of its good sales growth, despite taking a hit from investing in the margin in order to remain competitive.
“We’ve had to react to the market but we’ve got good sales growth – any retailer would take that growth and celebrate it – we’re growing, which is a positive,” he said.
“We’ve had to invest in our margin a little bit to do that, partly that’s the market plus a bit of Brexit, but the other reason that sales growth hasn’t flown through the bottom line is that we’ve also been investing a lot of money into accelerating Naked’s growth.”