Naked Wines to cut jobs as sales continue to fall

Naked Wines announced job cuts on Thursday as it looks to reduce costs, as it reported a drop in sales over the peak third-quarter trading period, in line with its expectations.

Sales were down 10% at constant currency versus the same period a year earlier, although this was an improvement on the 18% decline seen in the first half.

Naked Wines said the average repeat customer base was 12% smaller, and sales per repeat customer were up 2%.

The number of new customers acquired rose 35% on the same period a year earlier, with a 70% increase in new customer investment.

The company said third-quarter adjusted earnings before interest and tax are set to be between £3m and £5m, consistent with expectations.

Executive chairman Rowan Gormley said: "As we saw at the half year, the reason sales are down on prior year is entirely due to a smaller repeat customer base reflecting lower investment in customer recruitment in the previous year.

"But for the first time we are seeing signs of new customer acquisition coming back to life which should support further improvement in the top line trend. We have also seen a stabilisation in net cash levels year on year and continue to expe t cash generation in the second half of FY25."

Naked Wines also said it plans to axe jobs across all levels of the organisation and reduce the size of the board, as it looks to reduce SG&A costs by £7m a year.

"We are a smaller company post Covid and our cost base has to reflect this," said Gormley.

At 1235 GMT, the shares were 11.5% firmer at 58p.