It’s not disappeared completely, of course. At least, not yet.
It’s just been swallowed up by Naked Wines. You know, the company that Majestic paid £70m for in 2015, presumably to cash in on the growth of online sales.
Well, now, it seems, the apprentice has become the master.
As part of that deal, Naked Wines boss and founder, Rowan Gormley, became the new boss of Majestic. And his new strategy is to ‘release capital’ from Majestic and put it into Naked Wines.
Some of the 200 stores will close, and Majestic itself is set to be rebranded as Naked Wines.
It’s still there, in other words. Kind of. But it won’t be what it was. Nor, I’d suggest, are there any guarantees of how long it will still be around.
Rather like the Cheshire Cat in Alice in Wonderland, it seems to be dematerialising bit-by-bit before our very eyes.
While there will be a rending of garments and gnashing of teeth across the trade at the disappearance of such a loved and respected name from our high streets, seen logically, it’s hard to be over-critical of the new strategy.
Online sales, after all, are going well. Naked has doubled in size since its acquisition by Majestic, sales are predicted to top £175m this year and it’s seeing double-digit growth.
Majestic, by contrast, has had to work hard just to stand still, and its sales are broadly flat. This is nothing more than representative of a sluggish UK wine market that saw Oddbins finally call in the administrators for the second time in eight years in January, and a gradual migration to more and more sales online.
Gormley, understandably, is not interested in throwing good money after bad, and it was obvious in the release put out by the company yesterday that Majestic and its whole bricks-and-mortar business is very much taking a back seat in their forward plans.
Or, as Gormley put it, ‘We believe that a transformed Majestic business does have the potential to be a long-term winner, but that we risk not maximising the potential of Naked if we try to do both.’
It’s not exactly the most ringing endorsement you’ll ever hear, and I’d imagine that most Majestic employees, rather than waiting to hear their fate in June will be brushing up their CVs over the weekend.
So far, so generally demoralising. The more specific question, I’d guess, is what this means for the on-trade. Majestic Commercial might only be a small part of the overall portfolio, but at a turnover last year of over £40m it’s still a significant business in its own right, supplying a good number of venues across the country.
Crucially, though, in an ever-more brutal on-trade environment, Majestic’s trade arm is finding it tough. Business slipped last year, and, national scale or not, it appears to be finding it hard to compete with the muscle of some of its specialist on-trade supplying competitors.
Significantly, there was nothing in the company’s statement yesterday which even mentioned Majestic Commercial.
And while a spokesperson for the company assured Imbibe that it’s ‘business as usual’ and that Commercial was ‘unaffected by [the] announcement’, it would seem likely that store closures, when they’re announced, will inevitably affect the company’s ability to supply its customers.
Gormley seems to have a gimlet-eyed focus on what’s working and little time for what isn’t. So it wouldn’t be a surprise were he to call time on the trade side of things if he thinks that the effort required to make it profitable could be better spent elsewhere.
It would be a shame if this were to signal the beginning of the end for a supplier which has done a great job of sourcing good wines at low prices. It’s no coincidence that Majestic Commercial has won a lot of Gold Medals in the Sommelier Wine Awards down the years with extraordinarily well-priced wines – and has won our Great Value Merchant of the Year award more than once.
But in an environment that seems to be getting tougher by the week, being good isn’t always enough.