Naked Wines says high demand for its wines from new and repeat customers across all its markets during the coronavirus pandemic mean that it now expects its full-year revenues to slightly ahead of expectations.
Demand, it says in a trading update today, has risen since restrictions on social gathering began, and it now expects revenues to come in at more than £200m – ahead of previous expectations of £198.8m. Demand has been highest in the US markets and, says Naked Wines, the pandemic may represent an “inflection point for the growth rate of the online category” and where the business is well-placed.
Naked Wine office staff in the UK, US and Australia have been working remotely since March 17, while its winemakers have been able to continue their work, and the business has found enough carrier capacity to meet its needs. In the UK, it has reduced its range in order to enable workers to use social distancing measures in its warehouses. Orders from repeat customers are prioritised.
The retailer has invested in new customer recruitment and full-year investment is expected to come in between £20m to £25m. The retailer says it has no debt and more than £50m of cash, which will help it to face uncertainty around future trading.
Nick Devlin, Naked Wines group chief executive, said: "During this unprecedented time, our absolute priority is the safety and wellbeing of our staff, customers, suppliers and winemakers and we have implemented necessary safeguarding measures in line with government advice in each of our markets.
“I am deeply proud of the way our teams have responded to the challenge of adapting to a new way of working in light of Covid-19 and their commitment to serving our customers. To the extent it’s safe to do so we are working hard to continue to connect wine drinkers with world class independent winemakers and bring a moment of normality and enjoyment into their homes without necessitating a visit to a store.
“In the short term, the introduction of social distancing has accelerated the shift in consumer buying behaviour towards online, leading to increased demand from both new and existing customers across all our markets. In the US, especially, I believe the current period could serve as an inflection point for the growth rate of the online category, and as the largest direct to consumer player in the US market we are well positioned as customers move online. Over the medium-term, Covid-19 and its economic impact clearly creates uncertainty. However, Naked, with its advantaged consumer proposition and strong balance sheet is well placed to meet the challenges of a changing consumer environment."
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.