10 | The Grocer | 10 August 2019 Get the full story at thegrocer.co.uk
analysis majestic
The sale of Majestic’s retail estate to the US equity firm is a
complicated one. So what lies ahead for Majestic and Naked now?
S
o that’s that. After
months of relentless
speculation, Majestic’s
retail estate has been sold to US
equity firm Fortress, in a deal
worth approximately £95m.
It gives the group’s CEO (soon
to be just Naked CEO) Rowan
Gormley a significantly bol-
stered chequebook to grow
Naked in the US, freed from the
turgid UK retail market.
Meanwhile Josh Lincoln,
Majestic’s UK MD, will con-
tinue to lead the business with
Fortress’ backing (it is under-
stood a potential top job for
former Tesco booze boss Dan
Will the future be bright for
Majestic after Fortress deal?
Jago is now off the cards). And
Lincoln has assured employees
and customers that no jobs will
be lost, nor stores closed, with
the sale.
Only its Ealing store is exempt
from the deal. It has been
instead sold to property devel-
opers. And Lay & Wheeler,
Majestic’s fine wine arm, will
be sold as a separate concern.
Majestic says it has “received
significant interest from multi-
ple bidders”.
So is it a good deal? It is a bit
of a complicated one. Fortress
has paid an initial sum of £78m
for Majestic’s retail and com-
mercial wholesale business
(including its French stores)Daniel Woolfson and will pay an extra £5m “con-
tingent on the post-Brexit reg-
ulatory landscape” and the
performance of the French busi-
ness. And then there’s the mat-
ter of an additional £12m loan.
One senior source calls it
“a very full price for the cur-
rent performance levels”. And
Majestic itself admits “in the
period since 1 April 2019, in
common with other UK-focused
retail operators, Majestic Retail
and Commercial has experi-
enced a challenging short-term
period of trading”.
There is certainly a degree
of hesitancy implied – espe-
cially around the French stores
and the effect of Brexit. Lincoln
Next up for Naked?
● Farewell to debt: The deal
eliminates Naked Wines’ net
debt, which stood at approxi-
mately £15.5m at the end of
the last financial year, and is
expected to be more than £30m
by the time the deal closes
● Shareholder payout: Naked’s
shareholders will see a return of
£3.8m thanks to a special divi-
dent of 5.2p per share
● Looking westwards: CEO
Rowan Gormley’s focus will
now largely be on growing
Naked’s presence in the States,
where he is reportedly mulling a
joint listing on the NASDAQ