Online wine seller Naked Wines has slashed costs and intends to cut them further as it aims to recover from a slide in sales that led to questions about its ability to stay afloat.
As revealed earlier this year, the business made a loss of £9.7 million in the six months to 2 October as sales fell by 20%, leading the company to warn their were questions about its ability to continue as a going concern. Last month, it warned that US sales had fallen further in the weeks since.
But executive chair Rowan Gormley, who took over CEO duties as Nick Devlin left the role last month, said the business was starting to get things back on track.
He said: “We are moving towards a period of sustained cash generation. We have taken out £3 million of cost with £10 million more to come and expect to generate £40-50 million of cash from inventory over the next 18 months.
"In addition we have made good progress with testing an enhanced customer proposition to restore us to growth. I want to thank our people, our winemakers and our customers for their support and reiterate our determination to make sure that they are rewarded for it.”
Investec analyst Ben Hunt said: "Importantly, there are signs that repeat customers remain loyal with monthly sales per subscriber currently up in all three markets. In the meantime, costs have come down substantially with further reductions likely – benefitting LTV and the ability to recruit new customers. Elsewhere, lower inventory commitments bode well for cash generation, providing management an opportunity to seek more flexible credit facilities.”
The shares recovered slightly after today’s results, up 4.4% for the day at 44.9p, leaving the firm valued at £33.2 million. That leaves them at roughly where they were before November’s warning. However, the shares have still lost two third of their value this year, and are down almost 95% since their peak in 2021.
