// Majestic Wine posts £8.5m loss for FY
// Sales talks for its Majestic business are into “advanced” stages
// Majestic Wine and Naked Wines businesses will be run independantly of each other for rest of year if sale can’t be completed this summer
Majestic Wine on Thursday revealed it had fallen to an £8.5 million loss for the year to April 1.
The wine specialist said that was on the back of an £8.3 million profit a year before, after it was pulled down by an £11.1 million store impairment charge.
The group said it is in “advanced discussions” to sell its retail brand and expects this to go ahead over summer, amid plans to focus the business on its Naked Wines online offering instead.
Majestic group chief executive Rowan Gormley said multiple bidders were in the running to buy the wine warehouse business, as well as reported interest from turnaround funds including OpCapita and Fortress.
Last month the company warned it expects its profits to dive as it continues to drive cash into Naked Wines as part of a major transformation.
The group reported a 6.3 per cent jump in full-year revenues to £506.1 million, driven by the rapid growth of Naked Wines.
Naked saw sales increase by 14.5 per cent to £178.4 million for the period, amid “increased investment” to acquire new customers.
It invested £19 million of new customer investment into the online division, up from £5 million the previous year.
Meanwhile the Majestic arm of the business saw revenues rise 1.5 per cent to £267.7 million despite tough trading conditions, while adjusted earnings for the arm slid by 15 per cent to £11.3 million.
Alongside the full-year figures, the company also announced the departure of Greg Hodder as chairman of the firm after four years.
Hodder will be replaced by chairman elect John C Walden.
“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,” said Gormley.
“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.”
The company added that 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.
Click here to sign up to Retail Gazette‘s free daily email newsletter
