The online wine retailer had to cut its workforce and saw tumbling sales after a difficult year
Naked Wines says it is seeing signs of a financial turnaround after a challenging period that saw the company downsizing its workforce in response to falling sales.
The retailer reported total revenues of around £290million for the year ending in April, marking a 13% decrease from the previous year’s figures. However, the firm highlighted this as an indication of recovery, especially considering the steeper 18% sales drop it experienced in the first half of the year, following a sharp 41% fall in new customer sales.
Rodrigo Maza, the Chief Executive, said he was confident the company is becoming a “leaner and stronger business”. Naked Wines operates an innovative business model that connects wine producers directly with consumers, who subscribe to a monthly payment plan contributing towards their future wine box purchases.
Following the announcement the company’s shares surged by over 10% on Tuesday. With approximately 792,000 patrons across the US, UK, and Australia, Naked Wines anticipates an operating loss between £13million and £18million for the year.
Nevertheless, when adjusting for one-time expenses, the company expects its earnings before interest and tax to reach about £5million for the year, aligning with the higher end of its prior forecasts. “With higher levels of cash, a moderating decline in sales and demonstrable underlying profitability, we have a strengthening platform from which to build as we continue to drive towards profitable growth,” stated Mr Maza.
He said that it had been a “challenging year for our winemakers, our staff, our customers and our shareholders”, holding hopes of continued progress in turning the business around in the following year. The company announced in January its decision to cut approximately 50 jobs as part of a scheme to decrease costs by £7million.
Moreover, February saw Mr Maza stepping into the shoes of the CEO, following November’s departure of the previous chief, just as the company issued warnings that yearly profits would dwindle due to poor US performance.
