Majestic Wine has seen its profits plunge by half after its earlier acquisition of an online rival.
The wine retailer said its pre-tax profits for the six months to 28 September tumbled to £4.3 million, down from £8.5m a year earlier, as a result of charges from its purchase of Naked Wines.
The group also unveiled an ambitious three-year turnaround plan to almost double annual revenues to £500m by 2019, from current full-year sales of £284.5m posted in June.
In the spring, Majestic bought Naked Wines for up to £70m. It also installed Naked Wines founder and boss, Rowan Gormley, as the chief executive of the enlarged business to boost the group’s fortunes.
Gormley replaced former Majestic boss Steve Lewis, who left the retailer in February after poor sales as the business faces increasing competition from supermarket rivals.
The firm also cut its store opening target to 230 stores from its previous plan of 330 outlets. It currently operates 211 shops.
It said the business would now change its “emphasis from opening new stores to a new customer recruitment to drive higher returns from the current level of investment spend.”
Last month Majestic scrapped a rule that forced customers to buy at least six bottles, saying the move reflected consumer demand for “simpler, clearer pricing”.
Gormley said: “Six months into my new job, it is clear to me that we have a solid core business at Majestic, and two great growth engines in Naked and our commercial business.
“We have a clear plan, which will require investment and take three years to complete, but will also deliver a better business that can create sustained growth in shareholder value.”