Naked Wines reports £15m loss

Online wine club Naked Wines has reported a loss of £15 million as its new sales dropped to £26.9m from £34m in 2022.

The news comes as the firm reported in May that it had an adjusted earnings forecast “slightly above” its previous estimate, db revealed at the time.

In October, Naked was forced to cut 6% of its workforce, making 30 staff members redundant in order to create a “leaner and more focused organisation”.

Chairman and founder of the company, Rowan Gormley, was a surprise re-appointment at Naked in July, following a delay of the release of the annual results which raised some eyebrows in the City, with some analysts questioning whether Gormley was the right man for the job.

Today (19 September), Gormley made an apology.

He said: “The whole board of Naked Wines regret that your support and patience as shareholders, winemakers, angels and employees has not been rewarded. We are all determined to remedy that.”

According to the results, total sales for the year were £354m, which was up 1% year-on-year, but down 8% on a 52-week comparable basis.

The firm has identified £10m per year further costs savings to attempt to get back into profitability, stating despite the results it had “foundations laid to make profitability sustainable”.

But it also said that the beginning of the financial year had “started slower than expected” with revenues down 18% in the first quarter, which was the result of sales to new customers being 41% lower and sales to repeat customers also down 15%, reflecting a smaller customer base year-on-year.

The company now said it expected full year revenue to decline 8-12%.

It said: “With revenue below our initial plan, we are marginally behind our destocking plans but have taken steps to further reduce future purchase commitments while continuing to manage costs tightly.”

Nick Devlin, group chief executive of Naked Wines said on the trading statement: “The trading environment is tough, but Naked remains highly resilient. We have taken decisive action and have met the key goals in our “pivot to profit” strategy. Our focus now is on delivering profitable growth.

“We recognise that the environment is likely to remain tough and are configuring the business to be profitable and cash generative despite challenging conditions. A leaner and more focussed Naked will be best placed to deliver for our customers and winemakers. I believe we can emerge from these challenges a stronger business.

“I want to thank our teams and winemakers for their support and commitment over the past year. Across the board they have embraced a program of rapid change and laid the foundations for future profitable growth ahead”

Last year, it revealed its annual sales increased by just 3% and at the time it said that sales could decline by 4% to economic uncertainty and the company’s struggling ‘new custom’ segment. Back in November 2021, the wine seller also blamed shortages and lack of supply for lower-than-expected figures.

CEO Nick Devlin said then that declared that the company would not “pursue growth at any cost” and instead would seek to trade at or around a break even level.

db has approached Naked Wines for comment on the results.