Naked Wines mulls US stock exchange listing after Majestic sale

Online wine retailer Naked Wines is reportedly preparing for a listing on the American stock exchange following the sale of Majestic Wine last week.

Naked Wines CEO Rowan Gormley

As reported by The Times, chief executive Rowan Gormley told investors that he is going to list the company on Nasdaq once the £95 million sale of Majestic to Fortress Investment Group is completed.

In November last year, it was revealed that Naked Wines US sales had overtaken those of the UK business for the first time.

Speaking to the drinks business in March, Naked Wines CEO Rowan Gormley said the company intended to dramatically increase its US operation, which was likely to account for more than half of its sales.

Last year, US growth rose by 19.3% and now makes up around half of the total Naked business. 

Total sales at Naked Wines in the year to April 2018 amounted to £156.1 million. Sales are expected to exceed £175 million this year.

A source familiar with the matter told The Times: “In three or four years this is going to be an American business with a UK and Australian offshoot.”

Naked’s online wine subscription service currently has over 200,000 customers or ‘angels’ who pay £20 a month to access wines at “insider prices”. It was founded in the UK in 2008 by Gormley and in 2015 it was bought by Majestic Wine.

Last week it was announced that Majestic was to be sold to Fortress Investment Group. The sale includes all but one of Majestic’s stores, its website, the commercial on-trade business, the French division (Les Celliers de Calais), and its headquarters.

The final Majestic store – the location of which is currently unknown – is being sold to an unnamed independent third party for redevelopment for around £5 million.

The sale does not include Majestic’s former fine wine division, Lay & Wheeler, which according to unconfirmed reports by Sky News last week, will be auctioned off at the end of August through Cavendish Corporate Finance. The fine wine division has attracted a number of firm offers primarily from private equity, Sky said, and is likely to raise around £10 million.

Proceeds from the sale will be used to eliminate the group’s debt and invest in the growth of Naked Wines. Additionally, around £3.8m will be paid to shareholders in the form of a dividend of 5.2p per share.

While the news that Majestic is to be sold in its entirety has been welcomed, writer and broadcaster Peter Richards MW told db that the specialist retailer “desperately needs to get its mojo back”.