Naked Wines shares dive as it ousts boss and warns of falling revenues
Naked Wines share price tumbled by more than a third today after the online retailer again reduced its forecast for full-year revenues, which are expected to decline by up to 16 per cent, against an earlier forecast of between 8 and 12 per cent.
The loss-making company also said its chief executive has stepped down after just three years in the role, blaming a conflict over his roles leading the UK and US operations.
Outgoing chief executive Nick Devlin will, however, retain his position as president of Naked Wines in the US for the moment.
As a result, the share price plunged by almost 36 per cent this afternoon to 29p as the market responded to the news.
Last month the company warned that it could go bust after it swung to a £15m full-year loss.
The AIM-listed business said it is at its “lowest point” of forecast liquidity and continues to expect converting excess inventory to cash over the next 12-18 months.
Rowan Gormley, the founder and chairman of the business that introduces customers to independent winemakers, said: “It is disappointing to be warning of underperformance against a recent forecast. While trading in the UK and Australia has been in line with the Board’s expectations, current trading in the US has fallen well behind, both in terms of sales and margin. Customer attrition remains at historically low levels.”
According the most recent annual report, the US is responsible for 48% of Naked Wines’ sales, against 39% for the UK.
Gormley added: “My view is that this shortfall is largely to do with execution, which in turn is largely due to Nick Devlin splitting his time across both the role of CEO and US president.”
“To resolve this situation Nick has agreed to step down as CEO and I will move to executive chairman while we recruit a replacement. Nick has agreed to help with the transition and stay on as US President through peak.”
Gormley, who took Naked Wines public through a merger with Majestic Wine, which was subsequently sold off, added: “I am sad to see Nick go, but his legacy remains. Naked Wines’ revenue has grown 50 per cent since he took the chief executive role.
“Nick leaves with a lot of the hard turnaround work completed, including testing some exciting improvements to our customer proposition, which we are testing at scale right now. He goes with our best wishes.”