Naked Wines reviewing operational, financial plans for next 18 months

Naked Wines tumbled on Wednesday as it said it was reviewing operational and financial plans for the next 18 months and announced the shock departure of non-executive director Pratham Ravi.

The online wine retailer said it will provide an update on the plans alongside a trading statement due on the week commencing 17 October.

"The group's focus is on developing plans demonstrating increased profitability, cost restraint and improved payback," it said in a brief statement.

"Alongside this process we are in active discussions to address our credit facility to reflect any revised plan."

Naked Wines said it remains in compliance with all obligations around this facility through the first quarter and expects to have headroom to the Q2 covenant tests.

The company also said that Ravi has resigned from the board with immediate effect, less than a month after joining.

At 1505 BST, the shares were down 39% at 88p.

Jefferies, which rates the stock at 'buy', referred to the update as "cryptic".

"We infer that ongoing pressures on order profitability from inflation and distribution, combined with the challenges of marketing efficiently at its enlarged scale, are seeing ROIs on New Customer Investment fall below target levels (1.75-2.25x 5yr payback)," it said. "In response, we would expect Naked Wines to pare back its level of investment in new customer recruitment - given the increasingly challenging global consumer macro backdrop, management looks to have made the decision that a more radical pivot towards profitability is the best course of action for the next phase."