Four months ago, the high street’s most famous specialist wine retailer, Majestic, looked doomed with many stores facing closure and the remainder set to be swallowed up by its online partner Naked Wines.
But now, in a welcome change of tack, Naked Wines has confirmed that, rather than ingesting its bricks and mortar partner, it’s putting it up for sale and is already in ‘advanced discussions’ with potential buyers.
It’s a move that will be celebrated in stores across the country with relieved employees sure to be taking advantage of the retailer’s current ‘25% off on all fizz’ offer.
Naked hopes to have any sale finalised by the end of summer, in time for the crucial Christmas trading period. Should a deal not have been finalised by then, the sale will be put on ice until 2020.
It’s a heartening outcome for one of the UK’s most famous names. As recently as March, Naked Wines was considering retaining the bricks and mortar business, but heavily cutting back on the number of stores – something which would also have had an impact on the trade arm, Majestic Commercial.
So the decision to sell the operation is a good outcome for the high street – and for any on-trade operators currently buying wine from Majestic Commercial.
Retail and commercial are now hand-in-hand. If anything, we’ll be working together even more closely now
Key to the decision seems to have been the profitability of both sides of the business. Between them, Retail and Commercial made pre-tax profits of £15m last year – albeit on a combined turnover of £300m – and both have grown over the last year.
With both arms of the business a viable proposition, this should allow Naked to command a large fee for any prospective sale – crucial for a company that’s eagerly eyeing expansion in the US.
The remaining Majestic businesses will likely be pulled more closely together.
‘Retail and commercial are now hand-in-hand. If anything, we’ll be working together even more closely now,’ said a clearly delighted Olivia FitzGerald, MD of Majestic Commercial.
‘Having that buying power, with local reach and local support is a unique thing to be able to offer.
‘There’s a lot we can do in terms of upping our game and bringing in some more innovative products – though it’s a bit early to elaborate on that at this stage.’
According to Naked there are ‘multiple bidders’ in the frame at the moment, though the company was tight-lipped about who they are, or how much they were offering.
But a spokesman did tell Imbibe, ‘It’s a lot of money being talked about, and no one is going to pledge that without a vision for the future.’
Majestic Commercial has said it will continue to mine the same seam of customers – local owner-operated businesses such as sports clubs – but is about to bring in an online ordering system that will allow for 24-hour order placement.
‘There will be a lot of customers who will be really happy today,’ said FitzGerald. ‘There’s a lot of goodwill towards Majestic.’