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Naked Wines says it is becoming ‘leaner and stronger’ after yearly sales drop

Wine seller Naked Wines has said it has started to see signs that its financial situation is improving (Naked Wines/PA)
Wine seller Naked Wines has said it has started to see signs that its financial situation is improving (Naked Wines/PA)

Wine seller Naked Wines has said it has started to see signs that its financial situation is improving, after a tough year which saw the retailer cut its workforce as it faced tumbling sales.

The under-pressure business said total revenues were about £290 million over the year to April, down 13% from the previous year.

But the company said this showed things were starting to improve since reporting an 18% drop in sales over the first half of the year, after a 41% decline in new sales.

Chief executive Rodrigo Maza said it was making progress toward becoming a “leaner and stronger business”.

The website works by connecting winemakers directly with buyers, who commit to paying a fixed amount each month which goes towards their next wine box purchase.

Shares in the business jumped by more than a 10th on Tuesday following the more upbeat update to shareholders.

Naked Wines, which said it had about 792,000 customers in the US, UK and Australia in the latest year, said it was expecting to report an operating loss of between £13 million and £18 million for the year.

But on an adjusted basis, which strips out one-off costs, earnings before interest and tax are expected to hit about £5 million for the year, at the upper end of the group’s previous guidance.

“With higher levels of cash, a moderating decline in sales and demonstrable underlying profitability, we have a strengthening platform from which to build as we continue to drive towards profitable growth,” Mr Maza said.

He added that it had been a “challenging year for our winemakers, our staff, our customers and our shareholders”, and that it hopes to keep making progress in turning the business around in the year ahead.

In January, the business announced that it would cut about 50 jobs as part of a plan to cut costs by £7 million.

It appointed Mr Maza as the new boss in February after its former chief executive left the role in November, at the same time that the business warned that its yearly profits would shrink following a weak performance in the US.