Is majestic finally a good buy?
Discussion
Following the announcement that majestic wine are going to rebrand and focus online the shares fell off a cliff again.
However, I’m trying to see why this stock seems so undervalued and unloved when you look at the fundamentals. They have seen massive growth, America is doing well and closing stores makes sense.
Anyone got any views?
However, I’m trying to see why this stock seems so undervalued and unloved when you look at the fundamentals. They have seen massive growth, America is doing well and closing stores makes sense.
Anyone got any views?
They're closing stores to follow the naked wines subscription model. Now that may work (I used to be a member) but it removes a whole swathe of walk-in customers.
Do you want to bet your investment on ALL those normal customers being replaced by people willing to pay a regular monthly subscription?
I have up with Naked because it was a pain having money locked up that I couldn't spend and had plenty of wine already. I suspect they have a lot of customers like me.
Before I invested I'd want to know what their churn was
Do you want to bet your investment on ALL those normal customers being replaced by people willing to pay a regular monthly subscription?
I have up with Naked because it was a pain having money locked up that I couldn't spend and had plenty of wine already. I suspect they have a lot of customers like me.
Before I invested I'd want to know what their churn was
keirik said:
They're closing stores to follow the naked wines subscription model. Now that may work (I used to be a member) but it removes a whole swathe of walk-in customers.
Do you want to bet your investment on ALL those normal customers being replaced by people willing to pay a regular monthly subscription?
I have up with Naked because it was a pain having money locked up that I couldn't spend and had plenty of wine already. I suspect they have a lot of customers like me.
Before I invested I'd want to know what their churn was
Yup. We've been members of subscription wine deliveries and always cancelled, usually quite quickly. Sometimes you don't want more wine and we found we tended not to be adventurous. We ended up with a pinot gigio lake.Do you want to bet your investment on ALL those normal customers being replaced by people willing to pay a regular monthly subscription?
I have up with Naked because it was a pain having money locked up that I couldn't spend and had plenty of wine already. I suspect they have a lot of customers like me.
Before I invested I'd want to know what their churn was
But I always find Majestic to be good when I go there, the queues aside!
Engelberger said:
Following the announcement that majestic wine are going to rebrand and focus online the shares fell off a cliff again.
However, I’m trying to see why this stock seems so undervalued and unloved when you look at the fundamentals. They have seen massive growth, America is doing well and closing stores makes sense.
Anyone got any views?
It’s difficult to know but my first reaction is that if there is no physical Majestic store then I will never shop at Majestic again. I’ve never bought wine online and not would I have any interest in some kind of monthly fee. However, I’m trying to see why this stock seems so undervalued and unloved when you look at the fundamentals. They have seen massive growth, America is doing well and closing stores makes sense.
Anyone got any views?
When we need wine for consumption I simply get in the car and go to Majestic and they kindly carry it all outside and place it in the boot of my car, all with a nice smile and the amazing ability to string a sentence together. I’ve tried wine buying online and it simply lacks any charm or pleasure and is too slow.
I use the the Majestic in St Johns Wood and the one in Stow on the Wold. I’m happy to pay because of the customer service and convenience. When the SJW one goes then I will simply use the Jereboam in Hampstead where you can walk in, buy, walk out and they drop it down to you later that day without charge. And in Stow someone will be already planning to take the Majestic property lease over and we will just all go there.
Given the typical Majestic location I’m not sure it’s going to be too different anywhere else.
I don’t think Majestic is cheap enough to ever compete online and that it’s average customer is happy to pay their costs for the luxury of physical procurement.
That’s a very UK centric and personal view but I think that if their stores disappear then they will simply cease to be of any relevance to a significant number of people who currently use their physical stores. Maybe this existing number is insignificant alongside existing online sales but it’s still a huge risk to argue that no significant online business has been acquired due to the physical brand presence.
DonkeyApple said:
It’s difficult to know but my first reaction is that if there is no physical Majestic store then I will never shop at Majestic again. I’ve never bought wine online and not would I have any interest in some kind of monthly fee.
When we need wine for consumption I simply get in the car and go to Majestic and they kindly carry it all outside and place it in the boot of my car, all with a nice smile and the amazing ability to string a sentence together. I’ve tried wine buying online and it simply lacks any charm or pleasure and is too slow.
I feel exactly the same. I don’t think this is a particularly clever move by Majestic.When we need wine for consumption I simply get in the car and go to Majestic and they kindly carry it all outside and place it in the boot of my car, all with a nice smile and the amazing ability to string a sentence together. I’ve tried wine buying online and it simply lacks any charm or pleasure and is too slow.
surveyor said:
The Naked wine model is not a subscription more a savings pot. You choose what to buy and when. We put a modest amount in and top up if we order before it has built up.
The wines are usually very good.
you're right, Ive had some wonderful wines, but my problem was I wasnt drinking the wine quick enough and ended up with about £200 in the pot and 50 bottles of wine at home, and they didnt want to give me my money back, so only way I could get it was to close my account.The wines are usually very good.
85Carrera said:
I feel exactly the same. I don’t think this is a particularly clever move by Majestic.
I’ve not looked into it at all and this thread is the first I’ve heard about the proposed change but my initial reaction is that this is just yet another retail high street business that faked growth for shareholders by using debt and now has a debt pile that it cannot refinance at a low enough rate and that to survive they have to rapidly slash expenditure which always means starting with wages and rents. They aren’t closing the physical stores because it is a good step forward for the business but because the Board have borrowed too much money and paid themselves too much to be able to weather consumer ups and downs.
We’ve half a dozen people coming over for supper tonight. I’ll be heading off to Majestics after lunch and I’ll be buying the wines that I know these guests will enjoy (although I’m always tempted to just by Tesco Lambrusco for their Philistine better halves
). I will be buying a few other wines for myself and my wife for the coming weeks and I suspect that the bill will be 3-500. I probably do that shop close to twice a month and it’s not ever going to go online, nor is it ever going to be tied into some monthly contract like a car rental or satellite TV and at 46 I know what wines I like and what I need for guests so have no interest in mixed cases or random suggestions from some chap who just pitches what makes him the most money. 85Carrera said:
DonkeyApple said:
It’s difficult to know but my first reaction is that if there is no physical Majestic store then I will never shop at Majestic again. I’ve never bought wine online and not would I have any interest in some kind of monthly fee.
When we need wine for consumption I simply get in the car and go to Majestic and they kindly carry it all outside and place it in the boot of my car, all with a nice smile and the amazing ability to string a sentence together. I’ve tried wine buying online and it simply lacks any charm or pleasure and is too slow.
I feel exactly the same. I don’t think this is a particularly clever move by Majestic.When we need wine for consumption I simply get in the car and go to Majestic and they kindly carry it all outside and place it in the boot of my car, all with a nice smile and the amazing ability to string a sentence together. I’ve tried wine buying online and it simply lacks any charm or pleasure and is too slow.
This involved a night where the wife, store manager and I got hammered on the stock
creating a shortlist.We have given them a bit of business since mainly due to the service they gave us back then.
If they were online only they wouldn’t have even been considered.
Thanks for the replies.
I think that Majestic didn't offer a very clear statement and it has hurt them. I cannot see them closing all stores, just unprofitable. Some stores seem empty as they are in the wrong places. Other stores do very well.
DonkeyApple - respect your opinions but debt doesn't seem to be that bad.
Hmmm. Also wondering about RBS after this weeks falls. Saying that one share I hold has fallen yet further this week due to mismanagement. Currently down 30%. Underlying business is very good so will hold my nerve for now. All good fun isn't it?
I think that Majestic didn't offer a very clear statement and it has hurt them. I cannot see them closing all stores, just unprofitable. Some stores seem empty as they are in the wrong places. Other stores do very well.
DonkeyApple - respect your opinions but debt doesn't seem to be that bad.
Hmmm. Also wondering about RBS after this weeks falls. Saying that one share I hold has fallen yet further this week due to mismanagement. Currently down 30%. Underlying business is very good so will hold my nerve for now. All good fun isn't it?
I’ve a feeling it is a debt related issue. They have a very low ROE but crucially I don’t think it’s profits are covering its debt cost by any safe multiple, aren’t they loss making?
I think they are looking to cut rents & salaries so as to be able to roll over debt at a fair price, if not try and pay it down. It’s a similar issue currently facing many chains which have expanded rapidly over the decade using debt rather than profits.
But it’s not a stock I follow.
I think they are looking to cut rents & salaries so as to be able to roll over debt at a fair price, if not try and pay it down. It’s a similar issue currently facing many chains which have expanded rapidly over the decade using debt rather than profits.
But it’s not a stock I follow.
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