Virgin Wines reports £4.3m net profit

Virgin Wines has reported a net profit of £4.3 million for the year to 3 July 2015 – its first full year results since a £15.9m management buy-out of online retailer Direct Wines in November 2013.

Jay Wright, CEO of Virgin Wines

Sales grew to almost £40m with key sales channels up 13% from 2014, with the number of customers making a purchase in the past 12 months rising from 150,000 in 2014 to 190,000 by July of this year.

A strong Christmas trading period, which saw like-for-like sales rise 20% and Prosecco sales jump by 170%, were key growth drivers, as was its management buyout of Direct Wines. However the company credited much of its recent growth its innovation within e-commerce channels, citing its customer-centric schemes WineBank and Sendagift.co.uk. 

Re-launched in 2011, WineBank lets customers invest cash in return for cheaper, exclusive wines. The uptake of the scheme has grown by 20% in the past year, with its 50,000 customers paying a chosen amount into their WineBank account at the beginning of each month, receiving £1 for every £5 invested in return.

“Wine Bank gives customers the freedom to buy what they want, when they want, with the ability to receive 20% extra value on their orders all the time”, said Virgin Wines CEO Jay Wright. “No other retailer offers this type of service; growing our Wine Bank is a big focus for us moving forward.’

Meanwhile Sendagift.co.uk, described as the “Interflora of the wine world”, launched in October last year and allows wines and spirits to be delivered free with a personalised message. 10,000 gifts were purchased through the site in its first nine months.

Virgin Wines has said it aims to grow its gifting customer base by 50%, and triple the retailer’s turnover to £1 million by July 2016.

“We have a challenging, but hugely exciting three year plan which we are well on the way to achieving”, added Wright. “It’s a plan that has been consistent since the management buy-out although we are always looking at ways to develop. After all, a plan is only there to be beaten. The company will continue to focus on acquiring 100,000 new customers per year whilst ensuring existing customers never want to go anywhere else to buy their wine.”

Virgin Wines was founded in 2000 and acquired by Direct Wines in 2005, reputedly for just £1. Wright, who had previously built mail order wine business Warehouse Wines, before selling it to Direct Wines in 2002, took over the management of Virgin Wines in 2008 and merged it with Warehouse Wines in 2009.