Direct-to-consumer online wine retailer Virgin Wines UK has revealed the loss of around £800,000 in sales after having to move it’s Christmas delivery deadline as the result of labour shortages caused by staff illness and self-isolation due to Omicron.
In a trading update for the six months ended 31 December 2021, the retailer said its expectations of both profits and sales are to be lower than consensus for the financial year to June, as a result of “uncertain trading and macro environment, coupled with numerous headwinds in relation to increased cost pressure”.
It has also issued a profit warning attributing spiraling inflationary, uncertain trading and other cost pressures despite reporting a 55 percent increase in sales to £40.5 million for the three month period.
Virgin Wines also reported total subscription sales accounted for 79% of all D2C sales in the period and finished the period with a net cash position of £13.6 million.
“The effect of the labour shortages was that the business had to ‘cut off’ for Christmas delivery two days earlier than planned to ensure all customers received their orders, negatively affecting sales by approximately £800k,” the company said in its trading update this week. However, it said the group had “largely been able to mitigate these pressures through highly efficient marketing, disciplined customer acquisition and strict control of costs”.
Jay Wright, chief executive officer at Virgin Wines, said: “As expected, the trading environment has evolved considerably over recent months and given strong prior year comparatives, we have worked hard to maintain encouraging growth from our core sales channels, whilst maintaining strict discipline around our customer acquisition and our cost control.”
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