Naked Wines has reported strong growth as its bid to increase repeat customers and subscriptions pays off.

Naked Wines - delivery

Naked Wines reported active customer retention rates at 80%

The specialist retailer recorded an adjusted EBIT of £2m for the 52 weeks to March 28, against a £1.5m loss the previous year.

Sales also rose 5% year on year on a constant currency basis to £350.3m, up 76% compared with pre-pandemic levels two years ago.

Naked Wines reported active customer retention rates at 80% while its subscription service, Angels, grew 9% to 946,000 customers.

The retailer invested £41.3m in new customer acquisition across the year as it seeks future growth opportunities.

Naked Wines has also announced a number of board changes, including the appointment of Deirdre Runnette and Melanie Allen as non-executive directors.

Naked Wines chief executive Nick Devlin commented: “Naked Wines started from the simple idea that there was a better alternative to the traditional wine industry model and that, by connecting wine drinkers directly to world-class independent winemakers, you could deliver a win for both winemakers and drinkers.

“In FY22 we are delivering on that idea at scale; we connected 964,000 active Angel members to 266 incredibly talented independent winemakers, offering consumers a direct connection to where their wine comes from and access to high-quality wine at affordable prices. 

“In the past year, we moderated investment responsibly as we navigated inflationary challenges. In that context, I’m pleased with the substantial growth in sales to repeat members supported by sales retention above our expectations for the year at 80% and our ability to deliver profitability.

“Looking ahead, Naked Wines is well-positioned to continue to grow amid a changing consumer environment. Our enhanced scale, attractive unit economics and healthy balance sheet allow us to continue to invest for growth. 

“At the same time, we will not pursue growth at any cost and our guidance is that we intend to trade the business at or around breakeven this year. We believe this is the responsible balance to strike in FY23, mindful of the levels of macro-economic uncertainty, but also of the opportunities we see ahead and the potential for disruptive models like ours to gain traction in tough times as consumers reevaluate their purchasing choices. 

“Additionally, we will focus on steps to ensure our contribution economics support sustainable growth and on striking an effective balance of quality and volume. I believe these steps will best enable us to increase customer lifetime value and therefore, over the mid-term, maximise our ability to deliver attractive, sustainable growth.”

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