Profit plummets at Virgin Wines after tough Christmas period
The retailer saw shares fall a 10th as it launched a full review of its business.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Christmas proved rough for Virgin Wines, and the business revealed on Tuesday that a worsening economy had added to its operational woes over the busy period.
The business said it had lost around £1.5 million in revenue because it had to cut off Christmas sales a week earlier than usual.
The decision was taken because the wine retailer was having problems with the software which it uses to manage its two warehouses.
But that was not the only problem. The cold snap that snuck in across the UK in December also created challenges, as did the widespread postal strikes during the month.
Chief executive Jay Wright said: “As previously announced in our year-end trading update, profitability was impacted during the first half, with a number of macroeconomic headwinds exacerbating certain internal and operational challenges which we encountered particularly over our peak Christmas trading period.”
We are currently undertaking a full business review to ensure... we are positioned as positively as possible for future growth and profitability
The company’s pre-tax profit was almost obliterated, hitting just £90,000 in the six months to the end of December from £3.2 million the year before. It came as revenue also dropped off significantly, falling by 17% to £33.6 million.
Shares fell by around a 10th as Virgin Wines said it was launching a full review of its business.
It said consumer confidence has shifted significantly over the past 15 months compared to where it was during the pandemic, when lockdown helped delivery-based companies.
Shares in Virgin Wines peaked at close to £2.50 each in the spring of 2021, helped by the shift to online consumption during lockdown. But since then they have plummeted, and were around 42p on Tuesday.
The company said: “The business is currently undertaking a full business review to ensure we are fully leveraging the opportunities available to us and that we are positioned as positively as possible for future growth and profitability.”
The business has managed to start to resolve the warehouse problems. At the moment, more than 97% of orders placed before 4pm are dispatched the same day.