Naked Wines boss talks global ambitions as US sales soar above £150m


aked Wines today raised a glass to a “transformational” 2020 which saw sales in the $20 billion US market rise by 75% to over £150 million.

The US accounted for nearly half of the AIM-listed online merchant’s total revenues, and helped lift group sales growth to 68% in the year to end March, above guidance of 55-65%.

Revenues surpassed £330 million and membership was up 50% in the year to nearly 900,000. The company, which did not give a profit/loss figure in its trading update, had a cash position of £76.3 million at the end of the first half.

Chief executive Nick Devlin, who took the reins at the company in 2019, said: “We’re one of those rare British success stories – a company that has gone from the UK to the US and shown that you can actually sell things to American consumers. We are comfortably now the largest purely direct-to-consumer wine business in the USA.

“Our addressable market in the US is around $20 billion, and today we’ve got about 1% share of that market, so obviously there is an awful lot of headroom.”

Devlin admitted that as people return to bars post-lockdowns, the company is not expecting to see the same level of growth over the next year.

“I don’t think you’re going to see us post the same number we did this year – another +70 is going to be hard,” he said.

Around 40% of the company’s shares are held by American investors, and Devlin said he has found the US investor environment “liberating”, compared to the “slightly more short term focus on showing return immediately that you sometimes get in the UK”.

He said: “We believe the right thing to do is maximise shareholder value in the long term… we want to be the largest global direct-to-consumer wine business, and I think that’s a much more attractive goal than posting a profit this year, or even next year.”

He added: “It’s very noticeable the difference in questions and perspective you get from investors between the UK capital market scene and some of the investors who come on board in the US.

“There is more of an appreciation, and a reward, for looking to build a business that is really disruptive and can achieve genuinely substantial scale, versus maybe a slightly more short term focus on showing return immediately that you sometimes get in the UK.”

Analysts at Stifel said: “Data for the next 6-12 months should be crucial to refining medium-term customer growth ambitions and the path to profitability”.

They said: “With a healthy balance sheet, we believe investors are increasingly comfortable with the trade-off between revenue growth and profitability.”

Naked was acquired by Majestic Wines, which founder Rowan Gormley then ran as a combined business before selling Majestic in 2019 to private equity firm Fortress for £95 million.

Shares were up 0.1%, or 1p, to 806p on Thursday morning.

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