Naked Wines founder Rowan Gormley makes return to online retailer

Naked Wines has brought back its founder Rowan Gormley as board advisor ahead of the finalization of a new commercial strategy.

The online retailer said the South African-born businessman, 60, would occupy an unpaid position expected to last between two and three months, where he would “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 saw a sharp decline in sales growth due to the reopening of catering establishments.

The problems have been exacerbated by global supply chain disruption, leading to higher logistics and transportation costs and increasing macroeconomic uncertainty.

On Tuesday, Naked Wines said it was working on an 18-month plan to increase profitability and keep costs down and “in active discussions” over its $60 million credit facility.

But the Norwich group also revealed that Pratham Ravi, an analyst with Florida-based investment partnership Punch Card Capital, had resigned as a non-executive director after less than three weeks.

No explanation was given for his departure, leading Liberum analyst Wayne Brown to suggest that “something has gone wrong” at Naked Wines.

These problems have taken their toll Naked Wines Shareswhich have plummeted more than 84 percent this year, though they rose 7 percent to 97.4 pence on Friday afternoon after Gormley’s announcement was announced.

Chairman Daryl Rawlings said, “We wanted shareholder involvement in our ongoing operational and financial planning process.

“I am pleased that Rowan is providing us with his insight, as his operational familiarity with the company and his stance as a shareholder will provide a unique and valuable perspective to the board of directors in positioning Naked for long-term sustainable growth.”

Business model: For a monthly fee, ‘angel’ subscribers at Naked Wines can receive wine at discounted prices and rate the products they purchase on the company’s website

Gormley founded Naked Wines 14 years ago, after stints in the private equity industry and before tycoon Sir Richard Branson as the first head of Virgin Direct, later renamed Virgin Money.

The pair founded Virgin Wines in 2000, where Gormley spent eight years before being fired after a failed management buyout of parent group retailer Direct Wines.

Six months later, Gormley’s new startup launched Naked Wines and experienced rapid growth thanks to a unique and disruptive business model.

For a monthly fee, “angel” subscribers can receive wine at discounted prices and view the products they purchase on the company’s website.

Naked Wines then uses subscription fees to prepay independent wineries to make wine, assisting them with third-party bottling facilities, distribution and marketing.

Majestic Wine bought the company for £70 million in 2015 as part of measures to expand its online presence and gave Gormley the chief executive role of the expanded group.

Gormley left the group two years ago when Fortress Investment Group took over Majestic’s high street and just before the Covid-19 pandemic caused sales of Naked Wines to surge.

Over the past two full reporting years, total revenues grew 78 percent from £202.9 million to £350.3 million, and the number of ‘Active Angels’ increased by two-thirds to 964,000.