Naked Wines, an online retailer, has issued a performance review after announcing that sales declined 15% in the first half of the year to $112.3 million, despite management insisting it is in “a better position, both financially and strategically”.
Rodrigo Maza, who became CEO in February after joining the company as UK managing director in September 2023, stated that the company was in a better financial and strategic position, with “robust financial foundations” and committed and engaged members.
“Our strategic initiatives centred around customer acquisition and retention are generating learnings, and we are currently experiencing solid trading during the peak season period,” he told shareholders.
It also stated that a performance review is under underway in order to “proactively evaluate options to maximise shareholder value”. The end of the fiscal year will see the release of a report.
Naked Wines New CEO
He also welcomed new CFO Dominic Neary, who joined Naked Wines from Mind Gym in November, saying he was excited to collaborate with him “as we focus the business on cash, profitability, and growth with its rose wine and dry white wine.”A performance review is presently ongoing to “proactively evaluate options to maximise shareholder value,” according to the results, with a report expected to be released at the end of the fiscal year.
It also stated that it has continued to liquidate surplus inventory, with the UK and Australia returning to normal inventory levels, however US inventories remained “significantly” in excess, albeit being down $20.5 million from HY24.
It stated that it was “currently investigating options to reduce inventory levels more quickly,” which would help drive improved cash over the next two fiscal years, but “could lead to increased liquidation costs and result in EBIT at the lower end of guidance.”
Although active members (those with Angel or Wine Genie membership) declined 12% in the last 12 months, the statement noted retention of its ‘core’ members (those who had been customers for two years or more) was up two percentage points to 79%, and they remained “highly engaged”.
Customers’ total probability to refer the company to a friend (net promoter score) increased from 73 to 76 in the previous quarter, according to the report.
Turning Things Around
In August, the company reported a pre-tax loss of $16.3 million for the fiscal year ending 1 April 2024, up from $15 million in the fiscal year 2022/2023, with revenues down 18% to $290 million and repeat business down a quarter to $65 million.
Founder Rowan Gormley, on the other hand, asserted that the company was “making real progress in turning things around with its rose wine and dry white wine”.
It came after the engagement of debt consultants in March 2024 to look into refinancing possibilities and a possible wine company reorganization after the value of Naked Wines shares fell by about a third in the previous year.
Gormley increased his interest in Naked Wines significantly in December 2023, purchasing $9,600 in shares.
This was Gormley’s second round of stock purchases; he and other senior board members purchased a large number of shares in early November following a drop in share value after the firm stated it was lowering its full-year sales estimates to -12% to -16%.
Three of the company’s leaders at the time put a total of $94,000 in its stock.
