Majestic Wine chief Steve Lewis steps down

By Gemma McKenna

Published: 19 February, 2015

Majestic Wine's chief executive Steve Lewis is leaving the retailer with immediate effect, on the back of poor festive sales.

Steve Lewis Majestic CEO Steve Lewis is leaving the retailer with immediate effect.

Lewis, who rose through the ranks as a graduate trainee, has been chief executive for the past six years, and been at the firm for 29 years. Finance director Nigel Aldritt will become interim chief executive until a permanent replacement can be found.

Lewis has been under pressure in recent times - over the Christmas trading period the company took a gross margin hit, sacrificing 50 basis points in order to remain competitive. Lewis described the 10-week Christmas period as "particularly challenging" due to heightened competition. Its like-for-like sales over Christmas rose just 1.1%. City analysts cut their profits forecasts leading to a shares slump for the firm.

The group, which operates around 200 stores, saw half-year profits, to September 29, 2014, slip 10.5% to £8.5 million, which it attributed to investment in infrastructure, technology and consumer insights".

In addition, Majestic came under fire after asking suppliers to contribute a 4p per bottle retrospective payment to help fund its new warehouse in Hemel Hempstead. Suppliers told Harpers.co.uk they were "shocked" and that the request had "come out of the blue". "To think that suppliers should pick up the tab for this smacks of incompetence," one said.

The request was leaked to Harpers.co.uk back in October, shortly after Tesco's accounting scandal broke, which begged questions of how major retailers treat their suppliers. High street competitor Oddbins broke ranks to openly criticise the group, with managing director Ayo Akintola calling the move "one of the shabbiest business decisions" in the past couple of decades in the UK wine industry. At the time Majestic said the centre would facilitate business growth and benefit its partners.

Harpers' recent 'Demystifying E-commmerce wine' report identified trouble ahead for the retailer, particularly in managing to pitch its offer to suit both younger consumers and its established older ones. It states: "Majestic, the third ranked specialist online wine seller nationally, has a strong demographic footprint with middle-aged consumers. Among 35-44 year olds and 45-54 year olds, it accounts for 10 per cent and 19 per cent of the vote, respectively. The big challenge for Majestic is to recruit new customers from younger age bands, but without harming its image among core middle-aged consumers. Getting the price mix right could be the key."

Aldritt has served for 13 years on the Majestic board with various responsibilities including finance, IT and logistics. Phil Wrigley, non-executive chairman, will attend monthly operating board meetings in addition to his current responsibilities on an interim basis.

The group said Majestic "is entering a crucial stage of its development" and is looking to build its store and distribution network and further develop its multichannel offer.

The board added that this "busy next phase will require leadership commitment and continuity" which prompted the decision to "clarify the timing of [Lewis's] succession".

A search for a permanent replacement has been started and a thorough review of potential candidates is underway.

Wrigley said: "Steve has made a huge contribution to Majestic Wine during his time with the business. By combining his significant leadership and retailing skills with his determination, dedication and sheer hard work he successfully rose through the ranks from graduate trainee manager in our Clapham store to chief executive.

"He took the helm in 2008 in the midst of the credit crunch and subsequent recession and successfully steered the business through very difficult times. He leaves the business today in good shape, with sales up 41% and profit up 42% during his time as chief executive, and with the business well positioned for the next phase of its development. On behalf of the board and all our colleagues at Majestic, I thank Steve for his outstanding contribution to the company and I wish him well."

Lewis added: "It has been a privilege to have developed my career to date with Majestic Wine and I am proud to have played my part in its success over the years. The business is entering a busy and exciting next phase and now is the right time to hand over to a new leader."

Printer friendly version