Majestic plunges to loss amid ‘advanced’ talks to sell retail business
The wine merchant said it is in ‘advanced discussions’ to sell the Majestic retail brand and expects to offload it in the summer.
Majestic Wine has plunged to an £8.5 million full-year loss as it closes in on the sale of its retail store business.
The wine merchant said it is in “advanced discussions” to sell the Majestic retail brand and expects to offload it in the summer, amid plans to refocus on its Naked Wines online business.
The retailer slid to an £8.5 million loss for the year to April 1, from an £8.3 million profit a year earlier, after it was pulled down by an £11.1 million store impairment charge.
Rowan Gormley, group chief executive of Majestic, said multiple bidders have entered the frame to buy the wine warehouse business, amid reported interest from turnaround funds such as OpCapita and Fortress.
We are at a crossroads in the company’s history Rowan Gormley, Majestic
The group reported a 6.3% jump in full-year revenues to £506.1 million, driven by the rapid growth of Naked Wines.
Naked saw sales increase by 14.5% to £178.4 million for the period, amid “increased investment” to acquire new customers.
It pumped £19 million of new customer investment into the online division, up from £5 million the previous year.
The Majestic Retail business saw revenues rise 1.5% to £267.7 million despite tough trading conditions, while adjusted earnings for the arm slid by 15% to £11.3 million.
The retail business and Naked arm will be run independently from one another for the rest of the year if a sale is not secured this summer, with the process restarting in early 2020, the company said.
Alongside the full-year figures, the company also announced the departure of Greg Hodder as chairman of the firm after four years, to be replaced by chairman elect John C Walden.
It also announced the appointment of US Naked Wines president Nicholas Devlin to the new role of group chief operating officer, amid rapid growth in the firm’s US business.
Mr Gormley said: “We are at a crossroads in the company’s history. As laid out in March, we have taken the difficult but important decision to focus on Naked and exit from Majestic.
“As at the date of this announcement, our intention is to sell the business and we are at an advanced stage with multiple bidders.
“A further update will be provided if and when negotiations conclude, at which point we will seek shareholder approval to move ahead.”