Naked Wines founder Rowan Gormley makes return to online retailer as board advisor amid testing times
- Rowan Gormley’s return follows a more challenging year for the company
- Naked Wines has seen turnover slacken due to hospitality venues reopening
- Majestic Wine bought the business for £70m in 2015 and made Gormley its CEO
Naked Wines has brought back its founder Rowan Gormley as a board advisor ahead of the finalisation of a new commercial strategy.
The online retailer said the South African-born businessman, 60, would hold an unpaid position, expected to last between two and three months, where he will ‘represent the views of shareholders and advise the board accordingly.’
Gormley’s return follows a more challenging year for the company, which issued two profit warnings this summer and seen turnover growth slacken heavily due to the reopening of hospitality venues.
Entrepreneur: Rowan Gormley (pictured) founded Naked Wines 14 years ago following periods working in the private equity industry and for tycoon Sir Richard Branson
Problems have been compounded by global supply chain disruption, causing higher logistics and transportation costs, and rising macroeconomic uncertainty.
On Tuesday, Naked Wines declared that it was working on an 18-month plan to enhance its profitability and keep costs subdued and ‘in active discussions’ regarding its $60million credit facility.
But the Norwich-based group also revealed that Pratham Ravi, an analyst at Florida-based investment partnership Punch Card Capital, had resigned as a non-executive director after less than three weeks in his post.
No explanation was given for his departure, leading Liberum analyst Wayne Brown to suggest that ‘something has gone somewhat awry’ at Naked Wines.
These issues have taken a toll on Naked Wines shares, which have plummeted by around 84 per cent this year, though they closed trading 9.7 per cent higher at 99.9p on Friday following the announcement of Gormley’s appointment.
Chairman Daryl Rawlings said: ‘We wanted shareholder involvement in our ongoing operational and financial planning process.
‘I welcome Rowan providing his insight to us because his operational familiarity with the business and his viewpoint as a shareholder will provide a unique and valuable perspective to the board as we position Naked for long-term sustainable growth.’
Business model: For a monthly fee, ‘angel’ subscribers at Naked Wines can receive wine at discounted prices and review the products they purchase on the company’s website
Gormley founded Naked Wines 14 years ago following periods working in the private equity industry and for tycoon Sir Richard Branson as the first head of Virgin Direct, later renamed Virgin Money.
The pair set up Virgin Wines in 2000, where Gormley spent eight years before being sacked after attempting an unsuccessful management buyout of the retailer from its parent group, Direct Wines.
Starting Naked Wines six months later, Gormley’s new startup experienced fast growth through a unique and disruptive business model.
For a monthly fee, ‘angel’ subscribers can receive wine at discounted prices and review the products they purchase on the company’s website.
Naked Wines then uses subscription funds to pay independent wine producers in advance to make wine, and helps them with third-party bottling facilities, distribution and marketing.
Majestic Wine bought the business for £70million in 2015 as part of measures to expand its online presence and gave Gormley the chief executive role of the enlarged group.
Gormley left the firm two years ago when Fortress Investment Group took over the high street arm of Majestic and just before the Covid-19 pandemic led to Naked Wines’ sales accelerating.
Over the past two full reporting years, Naked Wines has seen its total revenues climb by 78 per cent from £202.9million to £350.3million, and the number of ‘Active Angels’ surged by two-thirds to 964,000.