Majestic Wine is to close retail stores and sell off assets as part of a radical transformation plan designed to focus on its Naked Wines business.
The booze specialist said that the plan, to be revealed in full in June, would result in the Majestic name disappearing. The group will instead be transformed under “one model and one management team with one focus, all under the Naked brand”.
Majestic said the strategy is aimed at building on the online and international sales growth being delivered by the Naked business, which it acquired in 2015.
The group said the transformation plan would be “focused on accelerating growth” in Naked Wines and would be funded by releasing capital from its Majestic retail and commercial arms.
It warned that the strategy could result in “substantial cash restructuring charges” from its 2019/20 financial year onwards.
Majestic, which will be renamed Naked Wines plc, plans to release cash by migrating customers and stores to the Naked brand, selling off assets and closing stores. It did not disclose how many shops would be shuttered under the radical plan.
Naked Wines has more than doubled in size since being snapped up by Majestic almost four years ago. Its sales are expected to top £175m this year.
Naked sells wines in the UK, USA and Australia and has built a portfolio of 200 winemakers, producing 1,000 wines in 18 countries.
Majestic boss Rowan Gormley, who founded Naked Wines and took charge of the enlarged group following its acquisition, said: “It is clear that Naked Wines has the potential for strong sustainable growth, and we will deliver the best results for our shareholders, customers, people and suppliers by focusing all our energies on delivering that potential.
“We also believe that a transformed Majestic business does have the potential to be a long-term winner, but that we risk not maximising the potential of Naked if we try to do both.
“Where we have no choice but to close stores we will aim to minimise job losses by migration into Naked.
“Therefore we have taken a decision to focus all of our capital and energies into delivering the long-term potential of Naked, and releasing value from Majestic. Our plans for doing this are well advanced, and we look forward to sharing the final details in June.”