Shares in wine delivery service Naked Wines plunged deep into the red today as the firm decanted its CEO after warning sales and profits are set to fall even faster than previously thought.
The company had already expected a rough year, with sales set to fall by about 10% and profits to fall by as much as 50% as wine delivery firms struggle to adapt to the post-pandemic landscape. But its US arm performed even worse than expected, as customers quit the subscription service.
Global sales are now set to fall by 12-16%, and underlying profit could tumble by almost 90% to just £2 million.
Chair Rowan Gormley said: "It is disappointing to be warning of underperformance against a recent forecast. While trading in the UK and Australia has been in line with the Board's expectations, current trading in the US has fallen well behind, both in terms of sales and margin. Customer attrition remains at historically low levels.
Gormley blamed CEO Nick Devlin “splitting his time across both the role of CEO and US president” for the poor performance.
Devlin today agreed to step down as CEO with immediate effect, with Gormley taking over CEO duties until a new boss is found.
Gormley said: “I am sad to see Nick go, but his legacy remains. Naked Wines revenue has grown 50% since he took the CEO role, and Nick leaves with a lot of the hard turnaround work completed, including testing some exciting improvements to our customer proposition, which we are testing at scale right now. He goes with our best wishes.”
Devlin will still lead the US business through the pre-Christmas peak season before leaving that role too. He was set to make a base salary of £350,000 this year, with the opportunity to earn up to £570,000 when including bonuses, though that figure would likely require the company to bring in sales and profits well ahead of the new guidance.
Shares plunged by as much as 36.4% to 28.6p, valuing the business at a little over £20 million. At its peak in 2021, Naked Wines was worth close to £600 million.
In September, Naked Wines warned it could go bust if a ‘combination’ of factors hit its cash flow, though this included a fall in sales of 17%, even worse than what is currently being predicted.
