Majestic shrugs off threat from refocused Thresher

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Majestic Wine brushed aside the potential impact of a fresh onslaught from its biggest rival, Thresher, yesterday as it reported strong underlying sales growth.

Tim How, its chief executive, said the wine warehouse group was unlikely to suffer from Thresher's attempts to increase its share of the off-licence trade because each targeted different consumers. "They are focusing much more at the convenience market, while our business is aimed much more at the wine enthusiast," he said.

Thresher, owned by Guy Hands' Terra Firma Capital Partners, is replacing its disappointing Bottoms Up and Victoria Wine formats with revamped Threshers outlets. It recently acquired leapingsalmon, the online provider of gourmet meal packs, in an attempt to increase its consumer appeal.

Robert Brent, an analyst at KBC Peel Hunt, said: "The competition is extremely benign. The other high street retailers will continue to suffer because they can't get the necessary like-for-like sales to offset their high fixed costs."

Majestic Wine, which owns 113 outlets in Britain and three in France, said recent like-for-like sales growth had slowed slightly from the 12 per cent increase achieved over the summer. Underlying sales in the six weeks to 15 November rose by 7.5 per cent, putting the retailer on track for a strong Christmas, analysts said.

The group has opened nine stores this year and plans to open a further eight next year. "There has been a step up in the rate of progress because we seem to be more successful in finding sites," Mr How said. Majestic, which sites new stores on land formerly occupied by car showrooms and petrol stations, sees scope for up to 175 sites across Britain.

Although ferry companies such as P&O have struggled to persuade Britons to holiday in France, Majestic said trading in its French stores had been "excellent". Sales at its Calais, Cherbourg and Coquelles sites rose 21.7 per cent over the summer, slowing slightly in recent weeks. "We are seeing the benefit from the work we did last year on refitting our stores," Mr How said.

Majestic reported interim pre-tax profits of £4.2m, up from £2.6m a year ago. This included an exceptional gain of £400,000 from selling and leasing back its site in Putney, south-west London. Sales grew 21.8 per cent to £69.1m.

Paul Dermody, the former chief executive of De Vere Hotels, has joined the board as a non-executive director.

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