Majestic swallows up Naked Wines

Naked Wines founder Rowan Gormley says the deal will create significant shareholder value. Picture: Neil Hanna

Retailer Majestic Wine is eyeing international expansion after agreeing to swallow online rival Naked Wines for up to £70 million.

Naked Wines, which was founded in 2008, runs a crowdfunded business where some 300,000 subscribers help fund more than 130 independent wine-makers in 14 countries in exchange for access to exclusive wines at preferential prices.

It generated sales of £74m last year, up 40 per cent on a year ago, but suffered a loss of £3.3m.

The firms said yesterday that the combination boosted Majestic’s online presence while providing Naked Wines with a nationwide store network to allow a click-and-collect delivery option for its customers.

Majestic and Naked Wines will continue to operate as independent brands.

As part of the deal Naked Wines founder and chief executive Rowan Gormley will take over as boss of the enlarged group. He replaces Majestic’s Steve Lewis who left the retailer after six years in February following weak sales.

Majestic trades from more than 200 outlets, including 15 in Scotland, and has over 640,000 active customers. In January it said like-for-like sales edged up 1.1 per cent in the ten weeks to 5 January, but that it had to sacrifice margin in order to shift stock during the period. Total sales lifted 3.7 per cent.

Gormley said the deal provided “the very exciting opportunity to build a world-class wine retailer, serving customers who are looking for inspiration that the supermarkets cannot provide”.