Virgin Wines hopes for more cheer after launch of value brand

Virgin Wines has said that the launch of its new value brand is expected to “significantly contribute” to the online wine retailer’s future growth, having brought in more than 8,000 customers last year.
Last December the company launched its Warehouse Wines range, offering customers a selection of wines that are all priced below £10.
Jay Wright, chief executive of Virgin Wines, said that he had been encouraged by the initial results from Warehouse Wines and was committed to investing in the growth of the brand over the coming year.
“Our expectation is that this will be a significant contributor to our growth over the next year and beyond,” he said.
The launch was one of a number of strategic initiatives that the company launched last year, including its bespoke Vineyard Collection, an Australian service called the Five O’Clock Somewhere Wine Club. In total, Virgin Wines has about 150,000 members of its subscription schemes, who have a choice of more than 650 wines that are sourced by more than 40 winemaking partners and suppliers across the world.
The Norwich-based firm was established in 2000 by Sir Richard Branson’s Virgin Group and was acquired by Direct Wines in 2005 before being bought out by the management team, led by Wright, in 2013. The business quoted on Aim, London’s junior stock market, in 2021.
The company said that its customer base continued “to show great resilience despite the subdued consumer environment” last year, while sales through existing customers rose 1.5 per cent in the 12 months to June 28.
Virgin Wines confirmed that it swung back into the black last year thanks to progress made in reducing cost through operational efficiencies despite a “sustained period of challenging trading conditions”.
The company delivered a pre-tax profit of £1.7 million, against a £700,000 loss a year earlier as revenues remained flat at £59 million. Gross margins increased to 31.9 per cent, up from 29.6 per cent in 2023 and it ended the year with a net cash position of £10.3 million, almost double last year’s figure.
The group added that the performance of its WineBank service, a scheme where customers pay money into an account that is then used to purchase wine, has been “particularly pleasing” as cancellation rates improved to 16.1 per cent from 17.3 per cent. The total amount of money held in WineBank accounts reached a record of more than £9 million before Christmas.
The shares closed flat on Tuesday at 38p.