Naked ambition: Oddbins and Majestic draw up battle lines
Competitive rivalry is one thing, but when it comes to Oddbins and Majestic the battle lines are more barbed than most, intensified by a series of public spats and showdowns.
Oddbins managing director Ayo Akintola infuriated Majestic bosses last November when he said the demands it was putting on suppliers were “morally repugnant” and bringing dishonour on the industry. Akintola even suggested Majestic was setting an example to the future leaders of the trade that “any action, however unethical, is justified”.
He strenuously denied he was attempting to point score but he certainly rattled Majestic’s cage and, since its £70 million purchase of Naked Wines, he can no doubt expect to find a few enemies in that camp too.
But making enemies in the Naked Wines team couldn’t be further from Akintola’s intentions, as a string of correspondence seemingly sent by Oddbins and leaked to the press last week shows.
In keeping with Oddbins’ quirky and typically unconventional style, Naked staff were sent love letters and wine as part of an elaborate courtship to win them over.
The letters began: “Shall I compare your skills to the rest of the industry? Yours art more lovely and fabulous.”
They were signed off as “your professional admirer” along with the phrase “love your work”, which corresponds to a Twitter account under the same name that is following a handful of Naked staff.
Initially Akintola denied he was behind the clandestine recruitment campaign, but he now admits it was Oddbins making the approach and dismisses the idea he was acting improperly. “Yes, we are behind it. I was hoping to achieve it by flying below the radar, but we were rumbled.
“There is nothing underhanded about trying to recruit staff from another company. It happens day in, day out, even within the wine trade.”
New Majestic chief executive Rowan Gormley knows exactly what a catch the Naked team is, having assembled it himself, and perhaps he would be flattered to hear Akintola praise the team as the “best in the digital space”.
In its only public response to the poaching mission, Naked managing director Eamon FitzGerald said: “I’m not surprised rival companies are eyeing up our talented staff. If I was in their position I’d want them too. Our one and only focus is on improving business for our angel customers, so I’m not worried about these sorts of things.”
But Akintola warns that Naked shouldn’t be complacent. “In terms of ‘why go after Naked staff?' the answer is quite simple. The core group we have identified is the best in the country and by best I am not only referring to the wine trade. I mean the best within the whole B2C digital space. You can’t blame us for wanting the best. In any case, when one doesn’t have £70 million to spend on acquiring talent, you have to be inventive and creative, which is the Oddbins way.”
Despite what detractors might say about Akintola’s approach, it demonstrates the size of his ambition for the business and shows he is prepared to go after the right talent to achieve it.
He admits one of Oddbins’ big weaknesses has been its online presence and he has a bullish attitude towards finding a solution.
He says: “In terms of priorities, the past couple of years have been about focusing on the retail estate and our online proposition hasn’t been strong. The core estate is now stable and moving in the right direction, which means attention can be turned to our digital operations.
“Our growth in the retail estate over the past four years has been driven in large part by consumer engagement in-store.
“So, with our focus now on developing the digital side of our business, it stands to reason that we would want these talented individuals to join Oddbins.”
He believes that if Oddbins doesn’t manage to tempt Naked staff to join the business, they will be won over by other firms outside the trade.
He adds: “There are two other companies not in the wine or drinks trade who are also looking to poach from Naked, so it is a three-way tussle.”
Akintola argues that Majestic’s takeover of Naked Wines has unsettled staff and given a once-loyal team an incentive to explore other avenues.
“Until the acquisition, the Naked ethos and culture was so strong it would have been next to impossible for anyone to poach these individuals, who were committed to a cause,” he says.
“These guys were expecting to become the Google or Facebook of the wine trade and not bought out by the type of company they had been fighting against.
“I don’t really feel there is anything that can be done to keep these guys at Naked. They are now in play and if I don’t get them to join Oddbins other companies will get them on board.”
He believes the calibre of the Naked staff is one of the reasons Majestic wanted to buy the company in the first place.
He adds: “Naked has little proprietary technology, so the Majestic deal was about acquiring the Naked talent pool. I expected that the talent would have been triple-locked prior to the deal being completed, so was totally surprised to find out it hadn’t been and that was our opportunity, which we took.
“Someone either dropped the ball or the belief is that the talent in the business is within the upper echelons. Either way by not triple-locking their talent pool they have given us, and the others trying to take on their staff, our chance.”
He is confident Majestic’s focus on its retail shops could drive employees his way.
“The Majestic focus is going to be on the bricks and mortar part of the business,” he says. “It is the profit generator for the combined group so it stands to reason that both its management time and investment would be devoted to this side of the business.
“On the other hand, Oddbins has been through the process of stabilising its bricks and mortar business and our focus and investment now will be devoted to the digital side of our business.
“Add in the fact that, culturally, Naked staff are closer to Oddbins than Majestic – we are a private company which can take a long-term view on things, compared to a PLC, whose shareholders are surely not that patient. We value our staff and we are not afraid of stating that publicly. We are slightly bonkers and the roles will be both creative and intellectually rewarding.
“In spite of all the current protestations about [Majestic and Naked] being separate businesses, sooner rather than later talk of synergies to be made will start, and that means change.”
However, while he admires the Naked model, he is adamant Oddbins will not be following the same path.
“Hell no – I might respect Naked staff and what the company has accomplished, but its business model is not in any way compatible with the Oddbins proposition.”
So has Oddbins’ oddball love letter had the desired effect or is it a question of unrequited admiration? “It’s gone down well. If there was a group of people who would respond well and appreciate the approach we took, it would be Naked and Oddbins employees, and this is what I mean by the cultural closeness of Oddbins and Naked.”
Akintola claims to have begun talks with a number of Naked staff, adding that some have come forward themselves, despite not being on his original hit list.
“You have to understand that these guys are smart and they are going to listen to what I have to say. It’s going to come down to us making the most convincing argument of their suitors.”