Majestic Wines’ big news
So Majestic made a big announcement just now that it is about to do a major restructuring of its business that will involve store closures and asset sales in order to focus on its online Naked Wines business.
Specific details will be out in June.
It has identified a £10m initial restructuring charge in the current financial year but said that there may be more to come over time.
Shares fell by almost 10% on the news.
For what it’s worth, I think this is a real shame because if it completely eliminates its store portfolio, it will be just another online wine merchant with not much to distinguish it from everyone else.
I guess the success or not of this move will depend on what it does with its physical presence and whether it just has a few “super-outlets” where you can taste everything or will it just keep its most profitable stores and let them carry on as before.
On the other hand, I would have thought that it must have a pretty impressive customer database with tons of information on preferences and purchasing history, so if it can somehow use that to its advantage it might be on to a winner.
Tricky times for tobacco companies
The other thing I wanted to mention today was increased worries for companies involved in vaping.
There was a proposal made last week by San Francisco to ban the sale of ALL electronic cigarettes products.
The main issue is the huge rise in popularity in vaping among teenagers that has largely – and ironically – benefitted San Francisco-based world vaping supremo Juul.
Tobacco companies with interests in vaping are obviously nervous about other places copying this move, but it’s not a given that everyone will follow San Fran’s example as it is often a bit of a maverick.
However Imperial Brands-owned Fontem Ventures, which makes Blu e-cigarettes and British American Tobacco-owned Reynolds American, which makes Vuse vapes will be nervous.
Mind you, they might not be as nervous as Altria which bought a 35% stake in Juul for $12.5bn last July. They will all just have to wait to see how things unfold.