UK retailer Majestic Wines is considering a sale of its entire UK store network as part of a plan to close shops and focus instead on its digital business Naked Wines, which the company bought four years ago.
The company has appointed bankers Rothschild to identify potential buyers for its Majestic brand and its 200 stores. It is one option stemming from a business restructure announced in March under which the company will rebrand as Naked Wines.
The group is contemplating selling its entire Majestic brand, but it is also exploring three options for each of its UK stores: sale, closure or rebranding as part of its high-growth Naked Wines business, which has generated sales of almost £600m since its acquisition in 2015.
Naked Wines’ revenues are growing faster than those of Majestic, which has faced intense competition from discount supermarkets and high costs associated with a high street presence.
Majestic on Tuesday said it wanted to explore ways in which its stores could be rebadged as Naked Wine and used as “shoppable wine showrooms”. It said the emphasis could be on “tasting and expertise to create an experience, rather than convenience”.
About 10 per cent of Naked Wine sales are generated at Majestic wine stores.
Majestic will reveal its final decision when it publishes full-year financial results in June.
Peel Hunt analyst Jonathan Pritchard said: “Essentially, management sees the future as almost exclusively digital: maybe there’s some value in a few stores almost as showrooms, but the Majestic Wine chain as it stands will cease to be part of the group, probably on a one-year-at-most basis.”
The company has already shifted some stores, with fishing retailer Angling Direct buying an old Majestic shop in Nottingham this month. Angling Direct announced on Tuesday it had bought the “destination store”.
In March Majestic said it expected to take a £10m charge this year as a result of the reorganisation.