Naked Wines shares nosedive as boss leaves ‘with immediate effect’

Naked Wines shares fell over 30 per cent on Tuesday after the group cut its annual forecasts and announced its chief executive was leaving the business.

Chief executive Nick Devlin has agreed to step down ‘with immediate effect’, with founder and chairman Rowan Gormley taking on the role of executive chairman on an interim basis until a successor is found.

Devlin will continue in the role of president of Naked Wines USA through the peak trading period before leaving the group for good.

Stepping aside: The chief executive of Naked Wines, Nick Devlin, has agreed to step down with immediate effect

AIM-listed Naked Wines’ first-half revenue slipped 11 per cent in the UK, 20 per cent in the US and 19 per cent in Australia, leading to an overall group revenue decline of 17 per cent.

The business now expects full-year revenues to fall by 12 to 16 per cent, against previous guidance for an 8 per cent to 12 per cent dip.

Adjusted earnings before nasties expectations were cut to between £2million and £6million, down from £8million to £12million

Naked Wines shares were down 34.44 per cent or 15.50p to 29.50p on Tuesday, having slumped over 70 per cent in the last year.

A weaker performance in the US drove the group’s decision to reduce its full-year profit and revenue forecasts, Naked Wines said. Repeat business fell short of targeted revenues and contribution margins.

Share slide: Naked Wines’ shares have fallen by over 70% in the last year

The retailer said, however, that second-quarter trading in UK and Australian markets had been broadly in line with previous forecasts.

The loss-making business said its chief executive had stepped down after just three years in the role, blaming a conflict over his roles leading the UK and US operations. 

Rowan Gormley, Naked Wine’s executive chairman who took the group public through a merger with Majestic Wine, said: ‘It is disappointing to be warning of underperformance against a recent forecast. 

‘While trading in the UK and Australia has been in line with the Board’s expectations, current trading in the US has fallen well behind, both in terms of sales and margin. Customer attrition remains at historically low levels.

‘My view is that this shortfall is largely to do with execution, which in turn is largely due to Nick Devlin splitting his time across both the role of CEO and US President.’

He added: ‘To resolve this situation Nick has agreed to step down as CEO and I will move to Executive Chairman while we recruit a replacement. Nick has agreed to help with the transition and stay on as US President through peak.

‘I am sad to see Nick go, but his legacy remains. Naked Wines revenue has grown 50 per cent since he took the CEO role, and Nick leaves with a lot of the hard turnaround work completed, including testing some exciting improvements to our customer proposition, which we are testing at scale right now. He goes with our best wishes.’

This post first appeared on Dailymail.co.uk