NAKED Wines yesterday announced a restructuring of the business in a bid to cut costs, including 30 redundancies.

The wine retailer, which enjoyed booming sales in the pandemic, yesterday admitted it had "made mistakes" while pursuing "rapid growth".

It comes after low consumer confidence and high levels of supply chain inflation have resulted in an underwhelming performance for the Londonlisted firm in recent months, with the firm's share price taking a hit of some 80 per cent over the past year to date.

However, shares in the Norwich-based company were boosted almost 30 per cent yesterday after news of the firm's strategic review.

Chairman Darryl Rawlings stepped down with immediate effect, with chief executive Nick Devlin saying operational changes at the firm had "been hard, but it has been necessary".

Rawlings will also step down as a member of the board at the end of the month, with David Stead stepping into his shoes as chairman immediately.

The company also said it had negotiated its banking facilities onto a "sustainable long-term basis" as it pledged to reset its cost base and slash future stock commitments.

Some teams at the company had been restructured "to create a leaner and more focused organisation", resulting in the loss of six per cent of the retailer's workforce.

Naked Wines also said it would slash marketing investment, which "not delivering satisfactory returns".

In the short term, the company forecast its sales and active consumers would drop due to the shift to focusing on profits over growth.

In June, Naked Wines issued a stark warning for shareholders, estimating that sales could plunge by as much as four per cent in the year to the end of March.

It also set out one-off costs of up to £12m to slash inventory and in general and administrative costs.

It comes after the company last year stocked up on inventory and added to its cost base "in anticipation of sustained faster growth which has not been delivered", chief executive Nick Devlin said.

In a note to investors, Liberum dubbed the strategic review as "sensible", with analysts giving the plan a vote of confidence.

(c) 2022 City A.M., source Newspaper