John Colley is now in his second term as CEO of Majestic Wine. Photo: George_Brookes
Majestic Wine's boss has vowed to double down on UK high streets as he unveiled plans to open dozens of new stores.
John Colley, Majestic's chief executive, said brick-and-mortar outlets would remain “sacrosanct” to the company while he's at the helm.
Over the past four years, Majestic has opened 15 new stores after being bought by US private equity firm Fortress.
But Colley now wants to accelerate that expansion by targeting suburbs, which are largely degrees protected from the cost of living crisis.
“I think we can open about 50 more stores in the next four or five years. , which is a significant investment,” he says.
British market towns such as Henley and Marlow are the focus of Majestic's expansion, while the business is also looking to open smaller stores as well as higher quality stores. – famous warehouse stores.
“We are an island of store owners and we love shopping,” says Colley.
Majestic has spent the last four years rebuilding its reputation among the middle class after spinning off from Naked Wines in 2019.
Customers enjoy the Majestic store experience. Photo: Majestic/Photography By Lynas
Ironically, Majestic's expansion comes at a time when Naked Wines is facing a cash flow crunch due to huge expenses during the pandemic.
Unlike Majestic, Naked Wines' business model is built on online sales, which have fallen sharply in recent years and caused its shares to fall 70% over the past year.
Colley says this proves that digital retail isn't always accessible. than they came up with, and shows how improvements to the Majestic are paying off since it was bailed out four years ago.
“It's a little ironic that we're now growing and opening stores while this digital business seems a little more difficult,” says Colley.
“[Majestic] has gone from being a loss-making company with a turnover of around £300 million to one earning more than £380 million and investing heavily every year.”
Colley, a former director of Argos and B&Q, told him was tasked with turning Majestic around for the second time in his career after Fortress took over.
The 52-year-old first took charge of the retailer in 2015, when it bought Naked in a £70m reverse takeover .
p>
However, after just two years, he resigned to spend more time with his children.
Colley was only lured back after Fortress acquired the business.
He says: “I think I've always been a big fan of Majestic and retail, which has an experimental aspect to what it does. That's why Majestic has been around since the 1980s. I think the “Naked” segment completely confused it all.”
Majestic was founded in 1980 by Sheldon Greiner, a former John Lewis dealer who found a way around the UK's tight restrictions on alcohol sales.
p>
Instead of selling individual bottles, Greiner sold cases at 12 bottles in warehouse stores in London's Harring and Battersea, and also offered expert tastings, meaning Majestic could trade throughout the day.
This warehouse is for bulk purchasing. approach coupled with wine tastings helped the business flourish among the middle class, fueling its expansion to more than 200 stores over the next two decades.
The company also opened two stores in Calais, which became a famous destination for “booze cruises” where shoppers flocked across the English Channel to take advantage of lower prices in France.
However, by 2015 the company was experiencing difficulties in conditions of fierce competition from supermarkets, which offered huge discounts to regain market share.
This led to Majestic buying Naked for £70 million eight years ago as the pair sought to combine physical and online retail.
However, despite pooling resources, the new venture failed to achieve the desired success. and it led to a split just four years later.
When asked about the failure, Colley says it was because longtime clients fell by the wayside as the business went digital.
“I think they were sincerely trying to make it make more money, but to do that you have to be very clear about what the business is.”
Colley is insistent on his change. The plan doesn't involve abandoning digital retail, but he says expanding stores will be his priority.
Another move Colley has made recently has been to expand his white-glove delivery service to customers, which is done through their Majestic vans rather than through third-party couriers.
He says, “You can.” . They won't do glass rentals with a courier, they won't do that. You won't be able to rent an ice bucket through a courier, and you won't be able to bring wine after the party – if you have some left, we'll take it back.”
Majestic also hired Rob Cook, Tesco's former head of beer, wine and spirits, as chief operating officer to fight back against supermarkets. He was tasked with finding high-quality wines that shoppers could find at Majestic, and not at local retail stores.
As for whether his investment plans will be derailed by young people giving in to alcohol, Colley remains confident.
“When I started working at Majestic in 2015, people told me, ‘You’re going to run out of clients,’” he says. “Well, we haven’t. We have more customers now than ever.”
Yet despite his optimism, Colley is calling on the government to do more to help the country's high streets.
“I know there are a lot of retail leaders who have left this country to work in places like the Middle East and Australia because it’s easier,” he says. “They don't work at the level we work at.
“I'm sad to say, but you look at some of the high streets around the country and you see empty apartments – I think that's a problem for the government. They don't allow retailers to invest in the business.”
And while Majestic's customers have been less affected by the cost of living crisis, he says they are not immune to current economic pressures.
“People have become more are price sensitive,” he says. “We don’t see a specific decrease, but someone may buy one less bottle. This is very similar to trends we saw back in 2008 during the financial crisis.”
Life hasn't gotten any easier thanks to the government's new alcohol tax, he adds, which has forced Majestic to raise prices at its stores.< /p>
“We all know that when you go to a restaurant, you order wine,” he says. “When you get married, you order wine.
“It's the most popular alcoholic drink in the UK, so why raise the tax to a level that would be prohibitive for some businesses?”
Recent Comments