Naked Wines brings back founder Rowan Gormley as chairman as sales miss expectations
- Rowan Gormley initially came back to Naked Wines as a ‘board advisor’ last year
- The South African-born entrepreneur started the e-commerce retailer in 2008
- Naked Wines also declared the publication of its 2023 results would be delayed
Naked Wines has appointed its founder as chairman to try and boost its growth as online wine seller revealed first-quarter sales were below forecasts.
Rowan Gormley was initially brought back to Naked Wines, the company he founded in 2008, as an unpaid ‘board advisor’ last September ahead of the launch of a new commercial strategy.
The following month, the firm announced it would ‘pivot to profit,’ partly through reducing investment spending and inventory levels, although it admitted this would impact short-term revenues and subscriber numbers.
Return: Naked Wines has appointed its founder Rowan Gormley (pictured) as chairman
On Tuesday, Naked Wines revealed that turnover in the opening three months of the current financial year had missed expectations, primarily due to lower volumes of new customer recruitment.
Should present trends continue, it expects total annual sales of around £300million, which would be approximately £50million less than it anticipated making for the 12 months ending 3 April 2023.
Naked Wines said Gormley was ‘well placed’ to help it win new customers at a faster rate on the way to achieving ‘sustainable, profitable growth.’
The South African-born entrepreneur founded the business in 2008 after being ousted from another company he founded, Virgin Wines, when he attempted an unsuccessful management buyout of the retailer.
He devised a unique business model whereby customers – known as ‘angels’ – can subscribe for a monthly fee to receive wine at discounted prices and review the products they purchase on the company’s website.
Majestic Wine acquired the company for £70million in 2019 and hired Gormley to be the chief executive of the enlarged firm. He left that position three years ago when Majestic was bought by Fortress Investment Group.
On his return to Naked Wines, he replaces David Stead, who had been chairman since November 2017, after previously being Dunelm’s chief financial officer and a finance director for Boots the Chemists and Boots Healthcare.
Stead said he was ‘pleased to be handing over the chairmanship…as the business develops plans to deliver profitable growth over the long term.
‘In my time with the company, it has more than doubled in scale and, most recently, we have successfully transitioned from a period of exceptional growth during the pandemic to the current focus on profit and cash.’
Naked Wines also declared that the publication of its 2023 financial results, which were due on 6 July, would be delayed in order to give auditors more time to finish their procedures.
Following this announcement, Naked Wines shares had slumped by 10 per cent to 89p on Tuesday, making them one of the biggest fallers on the AIM All-Share Index.
Naked Wines was a major pandemic winner and saw its shares soar as sales jumped. But its share price has plummeted by almost 90 per cent in the past two years, as the lifting of lockdown restrictions, reopening of hospitality venues and cost of living crunch led to a major slowdown in online wine orders.
The retailer spent significant sums on marketing and expanding its wine stock in anticipation of further growth, which subsequently failed to occur, while costs were further exacerbated by supply chain disruption.