10th April 2015
Investec analysts have upgraded Majestic Wine after it announced it is acquiring Naked Wines.
The £70 million deal will combine Naked Wines’ online expertise and Majestic’s national network of retail outlets. The move will see Naked Wines founder Rowan Gormley appointed chief executive of the overall company.
Gormley was also behind the launch of Virgin Wines, the Virgin One Account and Virgin Money.
Investec analyst Kate Calvert upgraded her recommendation to ‘buy’ with a target price of 360p on Majestic shares following the news.
‘The acquisition of Naked Wines…represents the sort of radical thinking we were hoping would come out of the strategic review and gives Majestic growth opportunities beyond the UK,’ she said.
‘Both businesses have much to gain from each other. We expect Gormley to look to unlock Majestic’s online potential, improve its client relationship management, leverage its store network distribution and moderate store roll out plans.’
The two brands will continue to operate independently. Naked Wines has a unique model and operates as a wine club where it encourages customers and wine producers to communicate via social media.
It has 300,000 customers compared with Majestic’s 640,000.