Virgin Wines (VINO) CEO interview with Jay Wright (JW), 11 November 2022
Here's the transcript of my recent audio interview here (also available on podcast).
Hello, I’m Paul Scott, and today I’m talking to Jay Wright, CEO of Virgin Wines, ticker VINO. Thanks for joining me Jay!
Quick disclaimers - I'm not charging a fee (or being given free wine!), this is not advice or a recommendation, and I don't hold shares personally. Please always do your own research on investments.
As usual, could we start by asking you to give an overview of Virgin Wines please.
JW: Virgin Wines is one of the UK’s largest direct to consumer wine retailers. Key focus is customer acquisition - large numbers, at low cost, high quality with good payback. We have several subscription schemes, wine advisory, and just pay-as-you-go wine sales. High customer retention rates. Unique sourcing model, maximises margins. Growing B2B commercial division, performing extremely well. We deliver industry-leading EBITDA margins, and maintain a strong balance sheet.
You did a very interesting results webinar for FY 6/2022 recently, on InvestorMeetCompany, I watched the recording, thank you for doing these, I know investors find them very useful. I’ll try not to duplicate that content. Let’s talk about the sector for subscription wine deliveries - it’s quite competitive (e.g. Naked Wines, Laithwaites, The Wine Society), with quite tight gross margins isn’t it, so what are your competitive advantages?
JW: Our high EBITDA margin, ahead of the competition, shows that we do have a competitive advantage. It’s key bringing in new customers at a low acquisition cost. Then retaining them for many years. So we want a business that’s a bucket, not a colander! Customers love the quality of the wines, and our service. We’ve been focusing on those things for over 22 years. Along the way we’ve learned how to do it really well.
Follow on - what are the costs:benefits of hiring the Virgin brand name? Has its advertising (e.g. the latest airline ad) gone over the top with wokeness, that might not fit your customer demographic?
JW: we have the brand name under licence since 2005. We pay a % of revenue to the Virgin Group for use of the brand. It’s a global, iconic, highly trusted brand. Lots of partnerships with other parts of Virgin, so there are lots of benefits. Any brand will have its advocates, and its…
