An analyst has said “something has gone awry” at Naked Wines as a director left after just three weeks at the company.
The company announced resignation of Pratham Ravi, who had joined the board just two weeks ago.
“The departure of an NED (non-executive director) who represented the group’s largest shareholder and had joined less than three weeks ago… so, something has gone somewhat awry,” Liberum analyst Wayne Brown said.
The online retailer’s shares dropped by another quarter when markets first opened after the update, released late on Tuesday.
As a result, the company said it is trying to “address” the credit facility which allows it to borrow money from its banks.
“The group’s focus is on developing plans demonstrating increased profitability, cost restraint and improved payback,” Naked Wines said.
“Alongside this process we are in active discussions to address our credit facility to reflect any revised plan.
“The group remains in compliance with all obligations around this facility through (the first quarter) and expects to have headroom to the (second quarter) covenant tests.”
Brown added: “The business update talks about cost-cutting, focusing on profitability going forward, which we interpret as a change in strategy and not being so aggressive on growth.
“This could imply a smaller business in the future and reining in ambitions, which makes sense considering how poor key performance indicators are.”
Naked Wines said it will publish a trading update for the first half of the financial year in the week beginning October 17.
