Naked Wines to cut jobs amid falling sales
Naked Wines has announced that it will be cutting jobs as it looks to reduce costs amid falling sales.
Sales in its peak third quarter fell by 10% at constant currency which was in line with expectations. This was better than the 18% decline seen in the first half of its financial year.
Naked Wines said its average repeat customer base was 12% smaller in the period, although sales per repeat customer were 2% higher.
Meanwhile, the number of new customers acquired was up 35% on the prior year, with a 70% increase in new customer investment.
Rowan Gormley, Naked Wines executive chairman, said: “I’m delighted with how the team pulled together to deliver a well-executed peak trading season. As we saw at the half year, the reason sales are down on prior year is entirely due to a smaller repeat customer base reflecting lower investment in customer recruitment in the previous year.
“But 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. We have also seen a stabilisation in net cash levels year on year and continue to expect cash generation in the second half of FY25.”
Gormley said the company’s cost base had to reflect the fact that Naked Wines is a smaller business post-Covid.
Speaking of the cost cuts, he added: “We have therefore taken the painful but necessary decision to reduce SG&A 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.”