Majestic Wine’s retail boss has insisted the future remains bright for the wine warehouse chain, despite confirmation that “advanced discussions” over the sale of its retail arm are underway, with a sell-off likely to happen within weeks.
The listed wine group said the process of selling its retail business and its wholesale arm, Majestic Commercial, was expected to be finalised “over the summer months”.
Numerous buyers have been linked to the sale over past weeks, including activist Elliott Advisors and fellow PE firms OpCapita and Fortress.
Majestic UK MD Joshua Lincoln told The Grocer: “Majestic is here to stay and rumours of our death were greatly exaggerated. [A sale] means we keep our independence and the UK keeps its national wine specialist.”
Despite the challenging retail landscape, Majestic Retail’s sales were up 1.5% for the year (vs a 1.9% rise the prior year) – though gross margins were down, which “drove a reduction in profitability”.
Sales across Majestic and Naked Wines rose 6.3% to £506.1m (with Naked’s sales up 14.5%) for the year ending 1 April, but profits fell into the red with a pre-tax loss of £8.5m. Majestic blamed the loss on its ongoing efforts to sell its entire retail estate of stores so it can focus on Naked, the more profitable online business.
“We’re growing in sales and I think any retailer would celebrate that at the moment,” said Lincoln. “The reason you’re not seeing that go through into the profit line is there has been pressure from the market, we’re using a lot of the group’s capital to invest in acquisition for Naked and we’re investing still in [the retail business].”
Majestic had installed new tills across its estate over past months and planned to revamp 23 stores over the next few, Lincoln said, adding: “Myself and the management team here at Majestic plan to stick around”.
He also revealed the business had hired former Tesco BWS director Rob Cooke as buying and trading director to oversee a major range review.
“He’s done a good review of the range so far – once the ink’s dried on the sale we’re going to come out with a detailed plan. A lot of the range he’s very impressed with but he sees a lot of opportunities as well. It’s going to make us have an even better range even more worthy of being a specialist.”
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