Why UK-based online wine retailer Naked Wines deliberately lost 95,000 customers
Key Points
- Naked Wines ended FY26 with 486,000 members, down from 581,000, after cutting customer acquisition spend by 56%
- Adjusted EBITDA rose 35% at constant currency to £7.6 million despite revenue falling 20% to £199.1 million
- The chairman called the company's old discount-led acquisition model "value destructive"
- Acquisition break-even improved from 75 months to 42, and Naked Wines bought back 10.5% of its shares
- FY27 guidance points to further revenue decline but higher profit of £7.6m to £9.0m
Naked Wines lost 95,000 members and 20% of its revenue in the year to 30 March 2026, and its full-year results show this was part of the plan.
The online wine retailer reported full-year results on Thursday (23 July), showing adjusted EBITDA of £7.6 million, up 35% on the prior year at constant currency and ahead of its £5.5 million to £7.5 million guidance range. Revenue fell 20% to £199.1 million, and the closing member base dropped from 581,000 to 486,000.
The company cut its investment in new customers from £20.8 million to £9.2 million, a reduction of 56%.
Chairman Jack Pailing wrote in his letter to shareholders that Naked Wines had historically chased new customers “attracted by a voucher offering a heavy discount” and accepted acquisition economics that were “not only below par but value destructive”.
Subsequently, the board concluded the company cannot compete with larger retailers at the cheapest end of the wine market and refocused on customers who value independent winemakers and provenance.
Fewer customers but better economics
Acquisition break-even – the number of months a new customer takes to repay the cost of acquiring them – improved from 75 months in FY25 to 42 months in FY26, and management expects to hit its 24-month target in the first quarter of FY27.
Naked Wines acquired 122,000 new customers in the year, down from 281,000, at an average cost of £76 each.
CEO Rodrigo Maza acknowledged the company misjudged how sharply volumes would fall, saying “we own the miss on volume”, but argued the customers it did acquire are demonstrably higher quality on early five-year lifetime value data.
The data backs this up as members tenured two years or more now make up 81% of the total, up from 74%, and their retention rate sits at 80%. Group member retention improved from 75% to 76%, and net promoter score rose from 76 to 77.
Price increases in the second half of the year further lifted gross profit margin from 18.4% to 19.9%, with UK repeat customer contribution margin improving from 16% to 17.9% despite new packaging regulations and higher alcohol duty flowing through costs.
The group ended the year with net cash of £33.4 million excluding lease liabilities, up £3.3 million, after returning £6 million to shareholders through buybacks that repurchased 10.5% of its opening share capital.
Underlying cash generation reached £9 million, and total inventory fell £10.4 million to £97.2 million, its lowest level in five years.
For FY27, Naked Wines guides to revenue of £158 million to £175 million alongside adjusted EBITDA of £7.6 million to £9 million and net cash of £34 million to £42 million.
Maza said member numbers and revenue “will not yet have stabilised” in FY27, but that profitability, cash generation and customer quality will keep strengthening.
