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Naked Wines inches to loss as it pushes ahead with turnaround plan

Naked Wines slipped to a loss for the past half year as it made the first steps in its turnaround programme.

Shares in the online wine retailer moved higher in early trading despite posting a £0.2 million pre-tax loss for the half-year to September 26, compared with a £1.3 million profit over the same period last year.

The firm told shareholders the loss came after it was impacted by inventory provisions.

In October, the group set out a new strategy to prioritise growing profits through an overhaul of its board and spending plans.

On Wednesday, the company said it cut 32 roles as part of the shake-up and slashed its marketing spend in order to reduce its costs.

Nick Devlin, group chief executive, said: “In the half we took the first steps to reduce our costs and drive improvements to our liquidity, profitability and unit economics in the near-term.

“Ultimately, we are laying the foundation for a return to our ambition of sustained, profitable growth, whilst also providing ourselves with greater resilience.

“As expected, in the short-term the changes we have undertaken have reduced our sales trajectory, though the full impact of this will be seen in the coming periods.”

Naked previously cut back its sales forecasts as a result of lower spending, telling shareholders it is likely to deliver a fall in revenues of between 4% and 9%.

Mr Devlin added: “However, the strength of our business model is clearly visible through underlying retention rates that remain unchanged to pre-pandemic levels, our success in realising price uplifts and improving payback levels.”

In the fresh update, Naked revealed that total sales increased by 4% to £165.8 million for the six month period, as it was buoyed by repeat customers.

Shares in the business were 1.9% higher after early trading on Wednesday.