Strong Christmas sales ease pressure on Majestic's Gormley

07 January, 2016

Majestic Wine plc has posted strong sales growth for the ten-week Christmas trading period.

The figures follow on from disappointing half-year results announced in November, which saw profits drop by 50% to £4.3 million for the 26 weeks to September 28.

When the acquisition of Naked Wines is excluded, together with fluctuating exchange rates and other variables, the group’s sales rose 12.2% for the ten weeks from October 27, 2015 to January 3, 2016.

Sales in Majestic’s retail arm grew 7.3% over the period, compared to a fall of 1.7% the previous year.

Like for like sales in mature Majestic stores had been in decline since 2011.

The results are an affirmation of new chief executive Rowan Gormley’s three-year turnaround strategy for the group.

Gormley has abandoned the company’s distinctive six-bottle minimum sales policy and scaled back its previous plans to expand its number of stores by 50%.

Majestic currently has 211 stores, a number it now plans to grow to 230 – as opposed to the 330 targeted by previous chief executive Steve Lewis.

Naked Wines, which the group acquired in April for £70 million, recorded growth of 28.9% over the Christmas period, reflecting both the strength of the underlying business model and the group’s renewed investment in its online platforms.

Majestic’s commercial arm grew 10.2%, while Lay & Wheeler fell back 3.5%. 

Gormley said: “This is an encouraging result. However there is still much to do. We are only three months into our three-year plan and although this performance is pleasing, it is too early to call it a trend.

“I take my hat off to the 1,000+ people we have, from Aberdeen to Sydney, who worked flat out during the festive season and deserve a large glass of wine.

“The teams have embraced our changes and worked exceptionally hard to deliver a better experience for our customers.”

Hannah Maundrell, editor-in-chief at www.money.co.uk, said: “Majestic recognised the need to move away from its wholesale-style business model before it was too late.

“By making its customer experience more 'lifestyle' with better-looking stores, wine tasting and the ability to buy bottles in any quantities, it has managed to widen its appeal.

“But Majestic Wine can't rest easy. It needs to continue working hard to stand up against Aldi and Lidl's ever-popular cheap-wine offerings.”




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Richard Hemming MW: beware inverse snobbery

Few things can bring communal pleasure so intimately as wine. Apart from a hot tub, perhaps. Sport can trigger mass jubilation, film gives us shared empathy, but wine has a nigh-unique ability to bestow conviviality among us through a shared bottle – which makes it especially galling that we spend so much time divided over it.

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