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Goodbye Majestic, hello Naked Wines plc as retailer plans name change

Drinks retailer Majestic Wine said today (25 March) that it intends to change its name as part of a significant group transformation plan which will be fully revealed in June 2019.

Focused on accelerating growth in its online brand Naked Wines, which it acquired in 2015, the transformation plan will be funded by releasing capital from Majestic and will result in the group operating under the Naked name.

Rowan Gormley, group CEO, said the decision has been made – and plans are well advanced – for the company “to focus all of our capital and energies into delivering the long-term potential of Naked, and releasing value from Majestic”.

Majestic said recent trading is broadly in line with consensus and it expects to achieve its £500 million sales target in the financial year ending 1 April 2019. But it said that Naked Wines continues to outperform, which it offered as justification for the radical changes.

Naked’s growth in repeat customer contribution is expected to increase by 10-15% year on year, and the intention is to accelerate new customer investment in Naked by an additional c.£6 million per annum to £26 million in the next financial year.

Since acquiring Naked, which stimulated a period of international and digital growth at the group, online trading has grown to reach 45% of all sales – while over 20% of sales are now achieved outside the UK.

"It is clear that Naked Wines has the potential for strong sustainable growth, and we will deliver the best results for our shareholders, customers, people and suppliers by focusing all our energies on delivering that potential,” Gormley explained.

“We also believe that a transformed Majestic business does have the potential to be a long-term winner, but that we risk not maximising the potential of Naked if we try to do both.”

He added: “Where we have no choice but to close stores we will aim to minimise job losses by migration into Naked.”

Majestic said that Naked had more than doubled in size since it was acquired, with sales expected to exceed £175 million this year. It has also developed a 200-strong international winemaker portfolio and built what was described as “a robust infrastructure able to deliver market leading service levels in each of the UK, USA and Australia”.

The transformation plan will see the group transform into “one model and one management team with one focus, all under the Naked brand”, and an increase in customer acquisition will be funded by a combination of releasing capital from migrating customers and stores to the Naked brand, as well as asset sales and store closures.

The exact combination of the above is expected to be finalised by June 2019, when Majestic is due to reveal its full-year results. The group will be renamed Naked Wines plc to reflect the changes.