Naked Wines director jumps ship as shares plummet

Naked Wines announced this week that non-executive director Pratham Ravi, an analyst at one of the online wine retailer’s largest shareholders, has resigned from the board less than three weeks after joining, as company shares plummet.

The direct-to-consumer wine seller recently hinted at a strategy shift in response to rising costs and falling demand, but the news has caused shares to plummet.

In a statement released late on Tuesday after the market had closed, Naked Wines said its focus was to develop “plans demonstrating increased profitability, cost restraint and improved payback”. The company is in “active discussions to address our credit facility to reflect any revised plan,” according to the statement.

James Crawford, the wine retailer’s interim finance director, said the review reflected the impact that inflation is having on customer spending habits, as well as increases in the cost of acquiring customers.

“If we are spending £40 million-plus on customer acquisition each year, then we have to be clear that we are going to get a satisfactory return on that investment,” he said.

He noted that the company is reviewing the optimum marketing spend in order to at least double company payback. Naked Wines plans to review operational and financial plans over the coming 18 months.

The company also separately announced the resignation of non-executive director Pratham Ravi, an analyst at Punch Card Capital, one of Naked’s largest shareholders. Ravi has resigned from the position less than three weeks after joining on 25 August.

News of his departure shocked analysts. Wayne Brown at Liberum said the director’s departure was a sign that “something has gone somewhat awry” within the company.

Brown warned that the company statement’s focus on strategy rather than growth “could imply a smaller business in the future”.

the drinks business reported a similar drop in sales for Naked Wines back in June, as CEO Nick Devlin announced the company would not “pursue growth at any cost”. Read more on that story here.

Naked Wines declined to comment on the reasons behind non-executive director Pratham Ravi’s departure. However, the company did stated that it intends to give an update on operational and financial strategy in October. A representative for the company told db: “We have indicated that our focus is on plans demonstrating improved profitability, investment returns and cost restraint, which represents a change from the plans outlined at year end.”

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