Majestic profits hit as City champagne spending loses fizz
WINE warehouse chain Majestic Wine saw its profits tumble last year as the recession took its toll, with champagne sales to the business world performing performing particularly badly.
Majestic said yesterday its core pre-tax profit fell 22.3 per cent to £12.7m over the year to end of March, while sales grew 2.4 per cent to £201.8m.
The group said sales to private customers, which make up the core of its business, held up relatively well. But it said UK corporate sales, particularly of champagne, had taken a heavy hit from reduced spending on entertaining, events and gifts.
Majestic also saw a significant decline in sales at its stores in northern France, after the appreciation of the euro discouraged consumers from travelling to France on so-called “booze cruises” to stock up on wines. The group said it had restructured the business, closing its distribution depot in Calais and cutting staff numbers.
But chief executive Steve Lewis sounded a positive note for the ten week period since the year end, when UK like-for-like sales rose two per cent, compared to a 2.7 per cent decline over the past year.
“The resilience of our core consumer business is encouraging, our market share has held steady and we are confident that Majestic is well positioned to benefit from any upturn in the economy,” he said.
Majestic added that the integration of the Lay and Wheeler fine wine business, which it acquired in March was progressing well.