Majestic buoyant on bubbly sales
Tuesday 21 January 1997
While most of the champagne-buying was seasonal, the company said it had sold large quantities of vintage bottles to forward-thinking party- givers who were already planning ahead to New Year's Eve celebrations at the millennium.
Majestic has been urging customers to buy their bubbly in advance of 1999 when it will make "very good drinking". Majestic has pre-sold some champagne which it is storing for delivery for the Millennium parties.
The comments came as Majestic announced a slip into the red in the first half to September. Profits of pounds 114,000 turned into a loss of pounds 82,000 as the company continued to invest in store expansion.
A further two stores were opened in November taking the total to 61. Another site will open in Manchester next month. Majestic plans to have 70 stores by March 1998.
"We have got several now at an advanced stage both legally and in terms of planning applications," said Tim How, the chief executive .
The expansion will be funded from existing resources which were boosted by the pounds 2m raised via the group's AIM flotation last year.
Majestic recorded impressive gains with sales in the three months to 30 December 22.4 per cent ahead of the same period last year. Stripping out the contribution from new stores, like-for-like sales growth was also impressive at 10.8 per cent. For the five weeks over Christmas, like-for- like sales were up by 12.7 per cent.
Majestic has proved a sterling performer since its shares were priced at 160p in November. Yesterday they edged up a further 2.5p to 290p.
Most of the wine market is accounted for either by supermarkets or by high-street off-licence chains such as Threshers and Victoria Wine. However, Whitbread is testing a warehouse-style off-licence formula which sells beer and spirits as well as wine.
Majestic was acquired by the current chairman, John Apthorp, who controlled a rival chain, Wizard Wine. Mr Apthorp had made his fortune through the sale of the Bejam frozen food stores to Iceland. He still controls 55 per cent of the shares.
The directors have pledged not to sell the bulk of their shareholdings until 1998.
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