Majestic Wine Sinks on Plan to Shut Stores and Focus on Online Brand
(Bloomberg) -- Majestic Wine Plc plans to shut stores and focus on its online Naked brand, in the latest blow to the U.K.’s hard-hit shopping streets.
The retailer plans to accelerate investment in the Naked Wines platform, under which customers fund winemakers whose output is offered for sale on the site. Majestic will shut an unspecified number of stores as it reallocates assets. The shares fell as much as 9 percent, the most since November.
“We have taken a decision to focus all of our capital and energies into delivering the long-term potential of Naked, and releasing value from Majestic,” Chief Executive Officer Rowan Gormley said in a statement. “Where we have no choice but to close stores we will aim to minimize job losses by migration into Naked.”
Majestic joins a series of U.K. retailers that are cutting back their bricks-and-mortar presence as online shopping expands and Brexit-related jitters hold down spending. Earlier this year, rival wine merchant Oddbins collapsed, with owner European Food Brokers appointing Duff & Phelps to handle insolvency procedures.
Majestic said it plans to achieve its sales goal of 500 million pounds ($658 million) during the financial year ending April 1. Naked, which the company acquired in 2015, continues to perform well, lifting the online portion of sales to almost 45 percent, it said.
The retailer said it plans to change its name to Naked Wines Plc when it presents full-year results in June.
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