Naked Wines warned that it could be at risk of going bust if a “combination” of factors all hit cash flow, as it revealed today it swung to a £15 million annual loss.
In delayed results, Naked Wines said like-for-like sales to the end of July fell by 8% and a writedown of unsold wine also dented the bottom line. Trading only got worse in recent weeks, and the business now sees revenue declining by 8-12% this year, below previous expectations.
The online wine retailer has cut its non-customer service workforce by 12%, but said it still needed to make more cost savings after underperforming this year.
Naked Wines said it should be able to continue as a going concern even in its “downside” scenario where sales slide by 17%, but this would require more predictable trading, cooperation from suppliers and new borrowing.
If “a combination of these assumptions” failed to materialise, Naked Wines said it may not be able to pay its debts
Shares lost another 6.6p to 64.4p and are down more than 90% since peaking in 2021 after sales had boomed during the pandemic.
Naked Wines founder and chairman Rowan Gormley apologised to shareholders for the disappointing results.
“Firstly, an apology. The whole board of Naked Wines regret that your support and patience as shareholders, winemakers, Angels and employees has not been rewarded,” he said. “We are all determined to remedy that.
“I am pleased to report that the management team have recognised the challenges very clearly, acknowledge where different actions could have been taken and are acting decisively to steer Naked through this period. They are highly motivated and determined to ensure that all stakeholders are rewarded for their support.”
Gormley added: “We do not have a general sales problem... what we do have is a new customer acquisition problem.”
Similarly, CEO Nick Devlin warned that major challenges were still ahead.
“We have much more to do,” he said. “We have ambitious goals and in some areas our testing has not yet unlocked the progress we need.
“Equally we recognise the consumer environment remains uncertain and the global wine industry is challenged with over-supply.”
