Naked Wines cutting jobs as sales continue to slide
The online wine firm said jobs were being axed across ‘all levels of the organisation’ under plans to save another £7 million a year.
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Your support makes all the difference.Under-pressure retailer Naked Wines has said it is cutting jobs across the business, including its board, to slash costs as sales continue to tumble.
The online wine firm said jobs were being axed across “all levels of the organisation” under plans to save another £7 million a year.
Naked Wines said that, to reflect this, it has “decided to reduce the size of the board” and announced that non-executive director of two years, Melanie Allen, had left the board with immediate effect.
About 50 jobs are going across the business overall and staff have been told, according to the firm.
We have to recognise that we are a smaller company post Covid and our cost base has to reflect this
The cuts were announced in a trading update showing that sales fell by 10% on a constant currency basis year on year in its third quarter and over Christmas, traditionally its peak selling season.
Just two months ago, Naked Wines’ former chief executive, Nick Devlin, quit the top post suddenly amid a severe profit warning, with founder and chairman Rowan Gormley taking over the running of the business until a permanent replacement is hired.
Mr Devlin stayed on over the Christmas period in his dual role as president of Naked Wines US before leaving the group completely.
Mr Gormley, who is now executive chairman at the group, said: “We have to recognise that we are a smaller company post-Covid and our cost base has to reflect this.
“We have therefore taken the painful but necessary decision to reduce SG&A (selling, general and administrative expenses) costs by £7 million per year, securing our profit potential.
“Sadly this means that we will be losing a number of valued colleagues who have been informed of our plans.”
The firm said despite the sales drop, trading over the past quarter was an improvement on the 18% sales drop seen in the first half and added that it saw a 35% rise in new customers year on year.
“For the first time, we are seeing signs of new customer acquisition coming back to life which should support further improvement in the top line trend,” Mr Gormley said.
It said underlying earnings of between £3 million and £5 million are expected for the third quarter, in line with expectations.
Shares lifted 7% in morning trading on Thursday.
The group suffered a torrid first half, with a weak performance in the US causing it to warn that sales would fall by up to 16% over the full-year, hitting profits.
US sales dropped 20% and were 11% lower in the UK and 19% down in Australia in the first six months.