Naked Wines slashing costs to stay afloat as sales slide continues

Shares in Naked Wines (LSE: WINE) bounced 9% on Friday after the struggling online wine retailer outlined further cost-cutting plans in a bid to recover from a 20% slide in sales that has raised ongoing concerns.

The AIM-listed company, whose stock has plunged 65% year-to-date, made a £9.7 million pre-tax loss in the six months to October 2nd as revenues fell to £132.3 million. Repeat sales tumbled 16%, while customer attrition hit 33% – an all-time high.

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Founder and now executive chair Rowan Gormley said Naked Wines aims to generate £40-50 million in cash from cutting another £10 million in costs and offloading excess inventory over the next 18 months. However, the firm continues to warn that under a “severe but plausible downside scenario” its ability to continue as a going concern would be in doubt.

The online retailer benefited from a lockdown-driven surge in demand but has since struggled with acquiring new customers and managing stock levels. Former CEO Nick Devlin departed last month amid downgraded guidance.