Majestic Wine today launched a three-year transformation plan aimed at increasing sales to £500m by 2019. The plan, which puts the emphasis on more customers rather than more stores, came as it reported a 36% rise in first-half sales in the wake of its acquisition of Naked Wines.
The wine retailer, ranked as a Top100 company in InternetRetailing’s IRUK Top500 research, today said it pledged to create a ‘best in class’ customer experience in store and online, to expand its Naked Wine business, and to focus on recruiting new customers in order to make higher returns from its current levels of investment spending. The company has reduced its target number of stores from 330 to 230. Currently it has 211. It will also bring IT in house, to develop new platforms alongside supply chain work, to “deliver the availability and agility we need to compete in a multichannel world.”
The retailer reported sales of £181.6m in the 26 weeks to September 28, 36% up on the same time last year. At Naked Wines alone, the wine pureplay that Majestic bought in April, sales were up by 35% at £45m, while Majestic Wine’s core retail business saw sales grow by 5% to £112m. Majestic like-for-like sales, which exclude store openings and closures, were up by 2.3%. Pre-tax profits of £4.3m were 50% down on the £8.5m reported last time.
Majestic chief executive Rowan Gormley, who previously founded Naked Wine, said: “Six months in to my new job it is clear to me that we have a solid core business at Majestic, and two great growth engines in Naked and our commercial business. We have a clear plan, which will require investment and take three years to complete but will also deliver a better business that can create sustained growth in shareholder value.”
He said profit would be hit in the current year as the company tests new approaches, but after that he expects to see sustainable growth and returns from those initiatives.