How ‘customer-centric’ CEO Rodrigo Maza plans to revive Naked Wines

Naked Wines CEO Rodrigo Maza wants to talk about vouchers. For a long time, letterbox discounts offering up to £75 off a box of wine were the backbone of Naked’s customer strategy. They became symptomatic of the company’s failure to adapt to an ever-changing DTC landscape, Maza says.

“So many people think of growth as customer acquisition. I think that’s mistaken,” he says. “Growth starts with retention. That’s not an approach Naked has historically taken – a lot of its growth was led by investment [in acquisition], and specifically in vouchers.

“It was very innovative 10 years ago and it produced amazing results,” Maza concedes. “But the mechanic – this £75 discount – became the message. And that’s a problem, because we want to attract not only new customers but the right kind of customers.”

A key task for Maza as CEO has been adopting a broader marketing mix including SEO, PR and influencers. It’s a move he believes could turn around the business once heralded as “the Netflix of wine”.

“We’re building a more holistic approach,” he says. “We’re getting a tonne of reach that’s more cost-efficient and bringing in people that are actually interested in what Naked is all about, instead of only a discount.”

The need for a turnaround was all too evident. In November 2023, Naked CEO Nick Devlin stepped down as the company – which has struggled to match the soaring popularity enjoyed during Covid lockdowns  – reduced its full-year guidance on another gloomy set of results.

Founder Rowan Gormley returned and quickly identified Maza, who only joined Naked as UK MD in September 2023, as the man for the top job. He was appointed CEO-designate in January 2024 before being promoted permanently last April.

Maza believes his “commitment to customer centricity” persuaded Gormley he could return the business to profitable growth. Prior to joining Naked, he helped launch and scale several e-commerce and subscription businesses for AB InBev.

Even with that experience, though, Maza knows it won’t be a quick fix.  Naked’s revenues – which peaked at £350m in FY22 – declined 15% to £112.3m in the six months ended 30 September 2024. Chief culprits were a 12% decline in Naked membership over the past 12 months, as well as a 12% fall in new customer sales.

But Maza insists the picture is improving. The rate of membership decline is slowing, he says. What’s more, green shoots are emerging – such as narrowing losses, normalising inventory levels outside the US and an improvement in Naked’s liquidity. Its net cash position in the half-year swelled to £22.9m, bolstered by the early redemption of a loan related to the sale of Majestic Wine in 2019.

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“We’re certainly not happy sales have continued to decline,” he says, “but we are seeing a slowdown in that decline. While we’re still not back to profitability, we’re getting closer quarter by quarter.”

Tough decisions have been made to get costs under control. A “sizeable head count reduction” took place after restructuring last January. “You’d have to be a psychopath for that process to not take its toll,” Maza says of the redundancies. “It’s never going to be easy. But we went out of our way to treat people generously, to recognise their contributions. That’s important for the colleagues that left, but also for those that stayed.”

With more robust financial foundations – and a new CFO in former Mind Gym finance boss Dominic Neary – Maza is confident Naked can meet its full-year guidance. Revenues are expected to be in the £240m-£270m range with adjusted EBIT of between –£2m and £6m.

Customer retention

That confidence comes partly from ongoing efforts to better retain customers. Maza is particularly pleased with two changes: an overhaul of Naked’s onboarding process and an updated wine rating system for its members, known as angels. 

The onboarding overhaul has led to fewer new customers closing their accounts in the first three months, he reveals. The more accessible wine rating system, meanwhile, has enabled Naked to make better recommendations – also boosting retention. 

“If you try Naked, understand our proposition and decide it’s not for you I need to be fine with that,” he says. “What I cannot accept is people leaving without realising what this company is meant to deliver.”

For Maza, membership is the key metric from which growth will follow. “If we have a stable base, growing sales becomes a consequence. A mistake Naked made in the past was focusing on squeezing sales out of the member base without managing its decline.”

Nevertheless, investors – who have seen Naked’s share price fall 95% since its July 2021 peak – will justifiably ask when the bigger picture is likely to improve.

Maza acknowledges their frustration – but asks for patience. “It’s challenging to balance our day-to-day trading, delivering on our guidance and market expectations, while at the same time pushing through an ambitious transformation agenda. Internally we say it’s like we’re changing the tyre while the car’s moving.”

That challenge is only set to grow. In the short term, Naked is facing up to Trump’s proposed tariffs on US imports, plus forthcoming changes to wine duty in the UK that will impose higher taxes on stronger wines.

Maza believes Naked will be less badly hit, as its customers are less price-sensitive than average. “Our angels believe strongly in supporting independent winemakers, which puts us in an advantageous position.”

Longer term, though, perhaps even greater challenges will arise. In 2023, European wine consumption plunged to its lowest level since 1951, according to a report by the International Organisation of Vine & Wine. Consumption in the US and Asia is also on the wane. Then there are reports of Gen Z increasingly seeking lower-alcohol and alcohol-free options.

But Maza is bullish. “I don’t share this fatalistic view of the category,” he retorts. Younger generations, he believes, desire the “choice and provenance” offered by Naked, alongside its growing selection of mid-strength and low & no-alcohol wines. “Wine has been part of human history for thousands of years; I don’t think that’s going to go away in a decade.”