Majestic Wine’s pre-tax profit fell 22.5% to £18.4m, but new chief executive Rowan Gormley insists the retailer has “excellent future prospects”.
- Majestic Wine profits fall amid “challenging” year
- Overall sales, like-for-likes and online sales all improve
- Boss Rowan Gormley insists business has “excellent” prospects
Gormley, who took the reins after Majestic acquired Naked Wines in April, said he had outlined “a number of areas where customers are telling us that we need to do better”.
He has pledged to make the shopping experience “simpler, easier and more fun”, invest further in staff training and build “sustainable sales growth” through personalised service.
Gormley said he will also prioritise rebuilding Majestic Wine’s supply chain, delivering “robust and scalable” IT, and will limit new store openings to 20-to-30 locations that can deliver a “good return” on investment.
“I have only been group chief executive for 10 weeks but it is clear to me that the enlarged Majestic Group has excellent future prospects.”
Rowan Gormley, Majestic Wine
A full strategic review of Majestic remains “in progress”, the retailer said, results of which will be revealed alongside its interim results later this year.
But Gormley, who founded Naked Wines and took charge at Majestic in April after the latter acquired its online rival, has wasted little time in setting out his key priorities after Majestic Wine’s profits dropped. The retailer said the fall reflected “a number of exceptional, one-off costs” relating to the deal to acquire Naked Wines and subsequent changes in members of the senior leadership team.
Sales for the year ending March 30 were up 2.3% to £284.5m, while like-for-like sales in UK retail stores also rose 1.9%.
Majestic Wine Calais’s pre-tax profit dipped slightly from £1.5m in 2014 to £1.4m this year.
The retailer added that the number of active customers who made purchases during the year increased 5.4% to 678,000 as online sales jumped 12.4% to £31.1m.
Majestic Wine chief executive Gormley said: “I have only been group chief executive for 10 weeks but it is clear to me that the enlarged Majestic Group has excellent future prospects.
“Majestic Wine has many unique competitive advantages, especially its incredible staff. When combined with Naked Wine’s digital strengths, and both businesses ability to source exclusive and exciting wines for their customers, we are uniquely placed to build a fast growing international leading wine specialist.
“While my review of the business is ongoing, it is obvious that we need to make investments to reinvigorate Majestic Wine. These investments will initially suppress profit in the short term but I am confident we can rebuild momentum in this excellent business.
“At the same time we aim to maintain the international growth trajectory of Naked Wine and crystallise the benefits of having the two businesses in the same group. I am confident that we will create significant value for our shareholders over the medium term.”