Majestic Wine plunged to an £8.5m full-year loss while it closes in on the sale of its retail store business.
The retailer swung to the £8.5m loss for the year to 1 April, from an £8.3m profit in the previous year, after it was dragged down by an £11.1m store impairment charge.
But the group reported a 6.3% jump in full-year revenues to £506.1m, driven by rapid growth of its Naked Wines online operations.
Naked saw sales rise by 14.5% to £178.4m for the period, amid “increased investment” to acquire new customers.
The group injected £19m of new customer investment into the online division, up from £5m the previous year.
The Majestic Retail business saw revenues rise 1.5% to £267.7m despite tough trading conditions, while adjusted earnings for the subsidiary by 15% to £11.3m.
Shares were trading down more than 7% on Thursday.
The wine merchant said it is in “advanced discussions” to sell the Majestic retail brand and around 200 outlets, expecting to offload it in the summer, amid plans to refocus on its Naked Wines online business.
Rowan Gormley, group chief executive of Majestic, said multiple bidders have entered the frame to buy the wine warehouse business.
Sky News has reported on interest coming from turnaround funds such as OpCapita and Fortress, and on Wednesday, learned that Waterstones owner and investment giant Elliot Advisors had entered the fray to buy Majestic Wine, and that bidders must be prepared to pay at least £100m to take the business off Majestic’s hands.
The company said the retail business and Naked arm will be run independently from one another for the rest of the year if a sale is not secured this summer, with the process restarting in early 2020.
Alongside the full-year figures, the company also announced the departure of Greg Hodder as chairman of the firm after four years, to be replaced by chairman elect John C Walden.
It also announced the appointment of US Naked Wines president Nicholas Devlin to the new role of group chief operating officer, amid rapid growth in the firm’s US business.
Mr Gormley said: “We are at a crossroads in the company’s history.
“As laid out in March, we have taken the difficult but important decision to focus on Naked and exit from Majestic.
“As at the date of this announcement, our intention is to sell the business and we are at an advanced stage with multiple bidders.
“A further update will be provided if and when negotiations conclude, at which point we will seek shareholder approval to move ahead.”