Majestic Wine said that its network of more than 190 stores across the UK will stay open after its £95m sale to Fortress Investment Group was completed this week.
The deal marks Majestic’s formal split from Naked Wines.
Majestic said that, prior to the takeover, up to 140 of its shops had been earmarked for closure.
John Colley, former Majestic managing director, has returned to lead the new-look Majestic business and said this week that he and the new owner have ambitious plans to rebuild the retailer’s standing and grow its sales.
‘The key to Majestic’s future is simple,’ said Colley. ‘It’s the service our people provide, backed up by a range you simply cannot get anywhere else.
‘That connection isn’t what it should be – so we need to get the wines back in that our customers (and staff) love first. That isn’t rocket science.’
One of Colley’s first jobs will be to take advantage of the key Christmas selling season. Majestic had previously sourced an extra two million bottles of wine to mitigate against the risk of a no-deal Brexit.
Despite the extra imports, Colley said that he expected record sales of English sparkling wine this festive season. He said highlighted Austrian white wine as a dark horse, with sales of Austrian wine at Majestic up 70% year-on-year.
The retailer said it has asked staff and customers to suggest wines for listings. It has also opened a new store in south London, in Blackheath, it said.
Majestic said that it had sales of £300m last year, including revenue from its commercial on-trade and French divisions.
Original story (2 August 2019)
Majestic Wine sold to private equity firm Fortress
By Richard Woodard
Majestic Wine is set to overhaul its store network after the company was sold to US private equity firm Fortress Investment Group for a reported £100m.
The deal, announced this morning (2nd August 2019), includes Majestic’s 180-plus UK stores, its two shops in France, plus its on-trade division and company headquarters.
In an open email to the UK wine trade, the Majestic board outlined its vision for future growth, saying: ‘Fortress are not buying a retailer in distress, but rather one which is growing sales, customer base and market share. But we know we need to do more.’
The plans include a full range review, currently being conducted by the company’s new buying and merchandising director, ex-Tesco BWS director Robert Cooke, and focused on ‘getting back to what Majestic has historically done best’.
Majestic’s retail stores will be extensively refitted, abandoning its traditional warehouse look of piled wine boxes in favour of shelving and tasting areas, which the company said would make its stores ‘easier to navigate’.
A new service called Wineify will be launched, using eight wines to ‘gauge a customer’s palate’ and direct them to different styles of wine either in-store or online.
Majestic also announced plans to open a new store in south-east London, scheduled for September.
‘After nearly 40 years’ trading, the Majestic name came closer than ever before to disappearing,’ the board said. ‘We’re determined not to let that happen again, to continue to be the nationwide specialist we truly believe the UK needs – the vital bridge between indies and supermarkets, and a pivotal route to the British market for producers across the globe.’
Majestic managing director Joshua Lincoln added that he had received ‘thousands of emails’ from concerned customers when it was announced that the chain might be closed or rebranded in March this year. ‘It made finding a suitable buyer for the business crucial,’ he said.
Founded in 1980, Majestic sold more than 37m bottles of wine, spirits and beer last year, with a total turnover of just over £300m.
Fortress Investment Group is a global investment firm managing combined assets worth almost US$40bn at the end of March 2019. The Majestic purchase marks the company’s entry into the UK retail sector.
The sale of Majestic is a key part of the transformation of the combined Majestic/Naked Wines business, which will see the remainder of the company focus on online sales and the continued development of Naked Wines.
The deal was welcomed by Majestic shareholder Gatemore Capital Management, which has a 3.8% stake in the business, with managing partner Liad Meidar expressing ‘excitement’ about Naked Wines’ future prospects.
The news comes a day after reports suggested that Majestic is also set to sell off fine wine merchant Lay & Wheeler, with a deal likely to close in the next few weeks for about £10m.