Naked Wines calls in former CEO after shares get trampled


fter a share-price slump and a sudden, board-level resignation sent a chill through shares in Naked Wines this week, its former CEO is coming back to help it dress up revised “operational and financial plans”.

Rowan Gormley also has some skin in the game. He is a material shareholder in the Norwich-based tipple-by-subscription company which he founded in 2008, holding a stake of almost 3%. The South African entrepreneur was also the CEO of Majestic Wine after it bought Naked Wines and he has also worked for Richard Branson at Virgin Money.

Shares tumbled almost 40% in a single session this week and one of Naked’s directors, Pratham Ravi, resigned after just three weeks on the board. Ravi is an analyst for Punch Card Capital, a Florida investment firm that is also a major shareholder in Naked Wines, holding about 10% of its shares.

The Norwich-based company also said this week that it was “in active discussions to address our credit facility”, adding it was meeting “all obligations”. Its chief financial officer, Shawn Tabak, left in the summer, when there was also a profit warning and news that a key business metric — the retention rate of customers — fell to 80% from 88%.

Darren Rawlings, chairman, said the company wanted to involve investors it redrew its plans, adding: “I welcome Rowan providing his insight to us because his operational familiarity with the business and his viewpoint as a shareholder will provide a unique and valuable perspective to the board as we position Naked for long-term sustainable growth”.

The company’s existing business model involves customers committing to a fixed monthly payment which goes toward purchases from makers whose wines are often unavailable elsewhere.

As the cost-of-living crisis bites, subscription businesses across the economy are fighting to keep customers as budgets become constrained by soaring inflation. Web-based retailers have also struggled to keep hold of the sales surges that came with Covid lockdowns, after the re-opening of high street shops, pubs and restaurants.

Naked Wines’ stock turned around from opening losses to rise 5.4% to 95p on Friday. It will reveal the outcome of the process in October.

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