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Naked Wines confirms loss of £10.7m due to pandemic despite surge in sales

Naked Wines saw a 78% increase in sales in the US market and will continue its focus on the region

Naked Wines (LON:WINE) saw its sales surge during the pandemic, as the wine subscription company particularly saw growth in the US market.

While pubs, restaurants and bars have remained closed throughout much of last year, Naked Wines saw its sales increase by £340.2m.

The AIM-listed company also saw its customer levels rise by 53% in the year to March.

Naked Wines invested £50m in new customers, up from £23.5m the year before, which the company said will be paid back three times over over the next five years.

The more than doubling of investment saw the firm make a before tax loss for the year of £10.7m.

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Naked Wines saw a 78% increase in sales in the US market and will continue its focus on the region.

A of now, the firm is the largest direct to consumer wine seller in America, as it has adapted its operations to the rising levels of consumer demand.

James Andrews, personal finance expert at money.co.uk, said:

“Naked Wines has seen a slump in profits as a result of the COVID-19 pandemic, with many consumers reconsidering whether wine subscriptions are an affordable option in the wake of a financially difficult period.”

“With the recent news of its share price increases, this slump will come as disappointing for shareholders who are yet to see the company turn a profit.”

“Whilst Naked Wines benefited from the closure of the hospitality industry, and some consumers choosing to opt for a more luxury wine subscription service, it’s still not clear whether this will be enough to increase the company’s profitability despite rising share prices. Whilst it’s certainly not too damaging, the next year of growth for Naked Wines will determine its place in the online wine space.”

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