Online wine seller Naked Wines has seen revenues spike to “pre-Christmas levels” in April and May, as locked down shoppers turn to drink.
Revenues rose by 81% over the first two months of new financial year, which coincided with the start of lockdown. Pre-tax losses for the year to the end of March were also helped along by the lockdown, halving from £9.9 million to £5.4 million as revenues rose 13% to £208.9 million.
The growth was driven by the looming lockdown as coronavirus spread globally before it hit the UK. Growth in sales has continued as consumers turn to drinking at home as they can’t go out to eat, says the company.
This also drove a 15% growth in repeat customers to £45.7 million and sales retention was also up 2% to 83%. The online-only retailer also invested 20% more in new customer acquisition in 2019.
Nick Devlin, Naked Wines’ chief executive, comments: “We are ending the year with great momentum behind our growth plans and a simplified, well-capitalised online pureplay model that is ideally suited to the current climate. I believe the enduring impact of Covid-19 will be to accelerate trends towards direct, online models in categories like wine.”
Russell Pointon, Director and Head of Consumer for investment relations and research house, Edison Group adds: “Whilst the headlines will focus on the exceptionally strong current trading due to COVID-19, the company also saw improving momentum through the second half of FY20 so that results are marginally ahead of expectations with revenue growth of 20% and the loss before tax reduced by 46%. The company has invested in attracting new customers whilst increasing the contribution from repeat customers and seen strong growth in both: 14.6% and 14.7% respectively. Unsurprisingly, it looks to have been a big beneficiary of lockdown, with 81% revenue growth since the end of March, which has demonstrated the operational efficiency that is available to the business as it seeks to exploit its growth opportunities. Despite this very strong growth, management is not providing full guidance for the year given uncertainty as to how long the strong trading will last. The company had a net cash position of £55m at the year-end.”
Naked Wines was until recently named Majestic Wine, which is ranked Top250 in RXUK Top500 research
. The change of name came
as the retail business sold its Majestic Wine shops in a move that represented the choice to invest for the future in online rather than multichannel shopping. It currently works with more than 200 winemakers to serve customers in three markets, the US, UK and Australia.