Virgin Wines has returned to profitability after implementing a significant cost-cutting initiative across the business.
Despite group sales remaining flat at £59m, the wine specialist shifted from a pre-tax loss of £700,000 to a £1.7m pre-tax profit for the year ending 28 June 2024.
The retailer attributed the turnaround to increased operational efficiency, with its cost-cutting measures delivering £1.4m in annual savings.
Virgin Wines CEO Jay Wright said he was “delighted to reiterate a positive full year performance”.
“Despite a tough consumer backdrop, we are pleased to have increased new customer conversion rates, lowered cancellation rates and delivered a competitive cost per acquisition.”
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Fulfilment costs at Virgin Wines also dropped by two percentage points to 12% of revenue, despite a 10% rise in the national living wage.
The introduction of a new warehouse system in late 2022 helped reduce costs tied to customer returns and refunds by 50%.
Wright continued: “While the sector remains challenging, demand remains strong for our different subscription schemes and award-winning range of wines.
“This differentiated offering, underpinned by our unique open-source buying model and loyal customer base, positions us well to continue delivering growth.
“Looking ahead, and with Q1 trading being in line with our expectations, we remain confident of delivering a strong outturn in 2025 and beyond.”
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