Proactive Investors - Run By Investors For Investors

Majestic Wine confirms it is considering sale of retail business

Majestic is looking for ways to pour more money into its growing Naked Wines online business, and selling its stores would help to fund the additional investment
Majestic is demanding £100mln for its retail business, according to reports

Majestic Wine PLC (LON:MJW) has confirmed it is exploring the possible sale of its retail business as the wine merchant shifts focus to Naked Wines – its online wine club-cum-crowdfunding platform.

The AIM company was responding to a Sky News article, which claimed the controversial former owner of Comet, OpCapita, was among several parties interested in buying Majestic’s retail arm.

READ: Majestic Wine hints at divi cut ahead of radical shake-up

According to Sky, Majestic wants to wrap up the sale before a trading update in mid-June, and potential bidders have been told they must pay at least £100mln.

“Following recent press speculation, the group confirms that the sale of the Majestic branded retail business including its related B2B operations is one of the possible options being considered and the group has received a number of expressions of interest,” read Tuesday’s statement.

“The group continues to review all options and there remains no certainty that the sale of Majestic Retail will proceed nor as to the terms upon which any disposal would take place.”

At the end of March, Majestic set out plans to shake up its business in order to take advantage of the “significant growth opportunities” within the Naked Wines division.

Money needed for transformation plans

Bosses want to ramp up investment into Naked and shift focus away from its stores, which have come under pressure from supermarkets and declining high street footfall.

The company already expects to take a £10mln restructuring charge in this year’s accounts, while there is the potential for further “substantial cash restructuring charges” further down the line.

The sale of the retail division would help to fund this additional outlay, as would a cut to the dividend, which is also being considered.

Majestic shares, which have almost halved over the past year, were up 3.3% on Tuesday morning to 274.8p.

View full WINE profile View Profile

Majestic Wine PLC Timeline

January 09 2018
January 10 2017

Related Articles

US bills and cannabis plant
February 28 2019
CEO Mike Withrow has built AREV into what is now a cannabis and hops company that owns a series of promising businesses
true leaf pet product
March 30 2019
The company says both the cannabis and pet industries represent high-growth industries
Polish pizza
March 28 2019
In 2018, DP Poland’s system sales rose by 24% to 72mln Polish zloty (PLN) from PLN 58mln in 2017, despite a tough second half to the year as aggregators took a bite from its business

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use