It’s hard to imagine someone better suited to running Majestic Wine than chief executive John Colley. The 50-year-old ran the business once before. He’s a been a customer since the 1980s, when he used his dad’s membership card to buy cases of wine. He even says he cycles to counter the effects of his main hobby – trying out new wines – rather than for the love of the sport.
His passion for the 201-store chain is immediately obvious when the subject of the previous owner comes up – and what he perceives as its failings. Colley was brought in for his second stint at Majestic just over two years ago, when new owners, private equity firm Fortress, took control from Naked Wines.
Profits were falling, dozens of the popular wine-tasting counters had disappeared and some of Majestic’s best-selling wines were being cleared out to make way for little known independent producers that customers were not interested in, he says.
Opening doors: Majestic Wine’s chief executive John Colley says physical shops attract new customers
The low point for Colley came during his root-and-branch review of the business when he learnt, to his dismay, that his local Winchester store was about to close for good.
‘I felt sick,’ he says. ‘First, I live there. Second, it was one of our top 20 best performing stores. I was gobsmacked.’
He quickly re-signed the lease then combined it with an empty store next door to make a single large Majestic ‘superstore’. Winchester is now one of its top five performing shops in the country.
Colley says he inherited his mantra ‘retail, detail’ from his father – a director at Currys – focusing on small things that make a big improvement overall. With that he has since set about firefighting similar situations across the chain. He sums up what had happened: ‘This business had been through years of uncertainty, with closures, a lack of love and a lack of understanding of what it stood for.’
Majestic acquired its online rival Naked Wines in 2015 and Naked Wines’ boss Rowan Gormley took control of the group. But, by 2019, Gormley had decided to focus on digital sales – and very publicly put the fate of the shops in doubt.
‘When you’re telling national newspapers that Majestic is closing its stores, it doesn’t help trade,’ says Colley. The turmoil left customers ‘confused at best’ and at worst was ‘turning off loyal customers that we have had for decades’, he says.
He had worked with Gormley for 18 months from 2015. But Colley says he found that he ‘wasn’t aligned’ to the Naked Wines founder’s plans. When Gormley waved a white flag over the high street business, Colley got a call from potential private equity buyer Fortress, which then snapped up the chain.
‘As soon as the deal closed, in December 2019, I kind of got the keys to the car again,’ says Colley.
But a score of stores had already closed and more were on the brink of disappearing. Colley complains: ‘Majestic stores are the acquisition tool for new customers. If you remove them, you remove the ability to gain customers. So it was killing the company, basically.’
Naked Wines says focusing on the online business was in the interest of shareholders. But Colley remains focused on high street shoppers saying: ‘Our role is to help customers discover and buy wines they will love. I base my approach on that when I go to the shops. Do I discover something I will love? Do I get a really interesting story about it from one of the colleagues?’ The all-important wine tasting counters that ‘give you the experience to discover some new wines’ had been removed from about 40 stores, but have now returned.
Colley and his team replaced 70 per cent of the entire range in 2020 reinstating some of the chain’s most loved varieties which had been removed.
‘We had gifted business to some of our competition. But if my best customers like Macon Lugny, they like Macon Lugny,’ he says.
New stores opened in Beaconsfield, Beckenham and Henley – all within 30 miles of London. Another, Knutsford in Cheshire, is the haunt of Manchester footballers. Haywards Heath in West Sussex and Godalming in Surrey are next on the list and he is reopening one in Chippenham, Wiltshire, this year.
Unlike with many other high street shops, the arrival of Covid helped the chain’s fortunes. Overall wine consumption didn’t rise in the UK, he reckons, but demand at his shops did. Even though they were closed to the public for some time, staff loaded vans up and delivered the stock directly to homes.
‘People weren’t going to restaurants and pubs so were drinking more at home. That also got a load of lapsed customers back in very quickly,’ he adds.
Emerging from the pandemic has been ‘really, really strong for us’ with sales this year expected to be similar to last year’s £380million and profit similar too.
Does Colley think he has put the business back in favour with its core customers?
‘Yes, you only have to visit our social media platforms to realise we are back. Customers have responded incredibly positively,’ he says. A customer club, Wine Club by Majestic, and a rapidly growing relationship with hundreds of top restaurants and gastro pubs are also helping growth.
Colley adds that his experience of Fortress, which is backed by Japanese investment giant SoftBank, has been ‘completely different’ to the worst cases of private equity ownership reported elsewhere.
‘There are always private equity people that load businesses up with debt. They don’t support companies, they don’t let them invest,’ he says.
‘I can’t talk highly enough of Fortress. It has enabled us only to grow. It has invested millions of pounds into our ability to open shops and it loves the company.’
But, he adds, there are millions more customers shopping elsewhere who he wants to tempt into stores. He says: ‘We’re quite fortunate. Our most valuable customers have got money. We even saw that during Covid. I wouldn’t say we’re recession-proof but we’re probably better off than some retailers.
‘We think in the UK there are probably seven million high value wine customers we don’t have.’
So, as well as hunting for new wines, Colley can add hunting for new wine-lovers to his list of hobbies.