Naked Wines sales to exceed £200m as lockdowns raise demand

In an update to the City this morning, Naked Wines said it had seen “higher levels of demand from both new and repeat customers” in all of its markets, particularly the USA, “since restrictions on social gathering began”.

The digital wine specialist said it continued to “invest aggressively in new customer recruitment” and expects its investment for the year to be towards the middle of the £20m to £25m range.

While lockdowns have led to a spike in purchases, Naked Wines said “future trading dynamics remain very uncertain” and that it was “too early to provide updated guidance”.

Naked Wines said it had over £50m in cash and no debts, a position from which there has not been “any material change in patterns of customer funds withdrawals”.

It noted that in the UK, the US and Australia, its office staff have been working remotely since March 17 and its distribution network and supply chains are “robust and continue to operate”.

Chief executive Nick Devlin said: “During this unprecedented time, our absolute priority is the safety and wellbeing of our staff, customers, suppliers and winemakers and we have implemented necessary safeguarding measures in line with government advice in each of our markets.

“I am deeply proud of the way our teams have responded to the challenge of adapting to a new way of working in light of Covid-19 and their commitment to serving our customers. To the extent it’s safe to do so we are working hard to continue to connect wine drinkers with world-class independent winemakers and bring a moment of normality and enjoyment into their homes without necessitating a visit to a store.

“In the short term, the introduction of social distancing has accelerated the shift in consumer buying behaviour towards online, leading to increased demand from both new and existing customers across all our markets. In the US, especially, I believe the current period could serve as an inflection point for the growth rate of the online category, and as the largest direct to consumer player in the US market we are well-positioned as customers move online. Over the medium-term, Covid-19 and its economic impact clearly creates uncertainty. However, Naked, with its advantaged consumer proposition and strong balance sheet, is well placed to meet the challenges of a changing consumer environment.”