Naked Wines cuts losses as it transitions to pure online player

Naked Wines has reported reduced losses in its year of transitioning to operating online-only while enjoying dramatic benefits from the effects of Covid-19.

The company revealed losses before tax had reduced by 46% to £5.4 million for the 52 weeks to March 30 as revenue increased 14% year-on-year to £203 million, with the US market proving particularly strong with growth of 20%.

This came alongside Naked reporting on current trading – that shows year-on-year revenue growth of 81% for the first two months of its new financial year 2021. Sales from new customers climbed 256% while repeat customer sales rose 50%. 

Bringing in new customers remains a core part of the Naked model and it reported an increased investment in attracting these new shoppers – up 20% to £22.9 million. The company forecasts a 4.9-times return on this outlay. This will be a key area of investment during the current financial year and will include a new £3 million research and development marketing fund to explore new channels of customer recruitment.  

Nick Devlin, group CEO of Naked Wines, said: “I'm delighted to report a strong set of results to conclude a year of transition for Naked Wines. We are ending the year with great momentum behind our growth plans and a simplified, well-capitalised online pure-play model that is ideally suited to the current climate. I believe the enduring impact of Covid-19 will be to accelerate trends towards direct, online models in categories like wine and that Naked is well positioned to deliver the combination of quality, value and community customers are looking for.”

He will be helped in his task by the appointment of Naked CFO, James Crawford, to the role of managing director of Naked Wines’ UK business, which he had been undertaking on an interim basis alongside his CFO duties.

Photo credit: Edsel Querini