AUSTRALIA: Wine Planet worries as Oz market goes flat
Australian on-line retailer Wine Planet yesterday admitted that it remained well sort of breaking even and would not be able to repeat last year's triple digit percentage growth in the Christmas quarter. The company blamed an overall down turn in on-line shopping and lower domestic wine demand.The company, CEO Mark Mezrani said Wine Planet was likely to increase its sales by 20-30% this quarter, while revenues would need to double to about $40m a year to break even.Richard Turner, the company's chairman, warned: "It would appear that there is a negative consumer sentiment developing which may have an impact on overall retail sales in this country and it is well known that domestic wine demand is down."However he remained bullish about the company's future. "The inherent scalability of the business should see, once break-even has been reached, very strong growth in profits for each marginal increase in revenue," he said.Wine Planet's stock has slumped 89% from its record high in February of A$2.50 and there looks like little hope of a short-term recovery. However, the company still has a healthy cash position due in part to Foster's Brewing Group taking what will eventually be a 25% stake and injecting $50m into the company.The company blamed the Sydney Olympics, a pre-GST buying surge and very little advertising for the drop in sales over the September quarter. Mezrani said the September drop followed sales in the June quarter of A$1.1m a record for the company.As well as establishing a UK business, wineplanet.co.uk in October, Wine Planet also has plans to develop new direct wine channels as the economy quietens. It has diversified into off-line sales of wine and food and operates two retail stores in Sydney.
Get full access to all content, just $1 for 30 days
A Message From The Editor
just-drinks gives you the widest beverage market coverage.
Paid just-drinks members have unlimited access to all our exclusive content - including 16 years of archives.
I am so confident you will love complete access to our content that today I can offer you 30 days access for $1.
It’s our best ever membership offer – just for you.
Olly Wehring, editor of just-drinks
- Pernod Ricard 's first-half results - Preview
- Pernod Ricard's H1 performance by region - Focus
- Carlsberg's Q4 & full-year results - Preview
- Heineken's FY performance by region - Focus
- Forget Baby Boomers at your peril - Consumer Trend
- Asahi Group lines up Grolsch, Meantime, Peroni buy
- Diageo completes wine category exit in US
- Pernod Ricard targets US through unit, exec switch
- William Grant & Sons' Ailsa Bay - NPD
- Beam Suntory targets Kenya with Edrington/FIX
- Global travel retail insights - market forecasts, product innovation and consumer trends
- What Next for Beer and Brewers Following the MegaBrew Deal?
- Global Whiskey Market 2016-2020
- Emerging Drinks Industry Trends
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research