Vintage Wine Estates names new CEO as part of Sonoma County-anchored company’s restructuring plan
Vintage Wine Estates, one of the largest U.S. vintners and maker of North Coast brands B.R. Cohn and Kunde, this week revealed a new CEO and more of its turnaround plan, in motion since earlier this year with goals of restoring profitability, generating cash and reducing debt.
The Santa Rosa-anchored public company (Nasdaq: VWE) on Thursday announced the hiring of Seth Kaufman as president and CEO and unveiled a five-point roadmap to cut annual sales, general and administration expenses by about $20 million.
For the past four years, he’s been chairman and CEO of Moët Hennessy North America, part of Paris-based luxury goods and hospitality group LVMH and producer of Napa Valley brands Chandon, Newton and Joseph Phelps.
Kaufman is set to step into the new role by Oct. 30. Also as part of the restructuring, Terry Wheatley, who has been president of Vintage since 2018 and with the company since it acquired her Napa-based wine company in four years earlier, resigned on Wednesday, interim CEO Jon Moramarco said during an investor webcast Thursday.
“Terry has been an integral part of Vintage Wine Estates’ growth over the years and has left an indelible mark on this company,” Moramarco said. “I believe her ingenuity and influence will continue to resonate here at VWE far into the foreseeable future. There are a lot of people here that are going to miss her.”
Moramarco, who replaced co-founder Pat Roney at the helm in early February, will move back to his previous role as an independent director. Roney is now executive chairman.
While much of the restructuring plan will already be well in motion before Kaufman is set to officially start, he is expected to guide further turnaround efforts, Moramarco said. The LVMH wine and spirits group had 2022 sales of $7.89 billion, of which North American sales accounted for $2.5 billion, according to the French company and Vintage’s announcement. Kaufman is said to have boosted the North American business unit’s profitability and annual sales growth into the high single digits.
“We are very excited to have him join us and believe we are positioning the company to enable success through this transition year in creating the pathway for a longer-term strategy to be developed,” Moramarco said.
In the past six months, Vintage has eliminated over half its product variations, reducing total stock-keeping units, or SKUs, to 2,000, started streamlining internal shipping lanes and warehouse operations, expanded annual bottling output by over 40%, raised prices on several brands and at tasting rooms, and increased shipping costs. Vintage also cut its workforce by 4% and forecasts that it may have trimmed staffing by 7% at the end of this fiscal year.
Vintage also has been selling assets. In May, it noted the sales of 965-acres Laetitia Vineyard on the Central California Coast for $9.5 million and the 42-acre Tenma Vineyard in Napa Valley for $11 million.
This week Vintage said it also sold The Sommelier Company, a Southern California-based wine tasting organization, and the Walla Walla, Washington, building that houses Tamarack Cellars, leasing back the facility from the new owner.
But Moramarco said on the webcast that it is not in the position to have to sell assets, so it will be looking for the best deals. And the company likely will be looking to pick up key assets in the future.
“(Mergers and acquisitions) will be a critical component of growth going forward,” he said.
Vintage is expecting revenue for last fiscal year, which ended June 30, to have been around $290 million, with gross margin of 30% to 32%. That’s total profit as a percentage of sales. The company is forecasting a revenue decline of $48 million next fiscal year, with a foreseen range of $250 million to $270 million, with gross profit margin of 37% to 39%.
Vintage Wine Estates is officially based in Incline Village, Nevada.
Jeff Quackenbush covers wine, construction and real estate. Reach him at jquackenbush@busjrnl.com or 707-521-4256.
