Warnings of hard times as Majestic Wines profits slide

MAJESTIC Wine has reported a slide in annual profits and its new boss pledged to scale back store openings, then warned earnings will take a further hit as he tries to inject some fizz into the business.

Chief executive Rowan Gormley said he wanted to make the shopping experience “simpler, easier and more fun” for customers as part of a series of initiatives to turn around the group’s fortunes and will cost about £3 million to achieve.

Pre-tax profit fell 22 per cent to £18.4m in the year to the end of March though like-for-like UK retail store sales rose 1.9 per cent.

The group had been planning to expand to 330 stores from its current 213 but the new boss said today that he wanted to limit new openings to 20 to 30 locations “that can deliver a good return on investment”.

He added: “It is obvious that we need to make investments to rein- vigorate Majestic Wine. These investments will initially suppress profit in the short term but I am confident we can rebuild momentum in this excellent business.”

The results showed Majestic’s number of active customers who made purchases during the year up 5.4 per cent to 678,000 and average spend per transaction unchanged at £129. Average price per bottle rose to £8 from £7.94.

Online sales rose 12.4 per cent to £31.1m while total revenue was up 2.3 per cent to £284.5m.