Vintage Wine Estates restructures organization, to reduce workforce by about 15%

Vintage Wine Estates announced that it is restructuring the business by seeking to monetize certain assets and exit certain non-core, lower margin product and service offerings. As a result, the company will be reducing its workforce by approximately 15% for expected annualized savings of $7.1M. Restructuring charges for the actions are expected to be approximately $1.5M, which will be reflected in the third quarter of fiscal 2024 which ends March 31, 2024. Seth Kaufman, President and Chief Executive Officer, commented “The complexity of our business has resulted in a disproportionately high-cost base. To drive margin improvement and generate cash we need to simplify beyond our product offerings and fundamentally reconstruct our business model. Getting from here to there starts by recognizing where our strengths lie and identifying the areas of the business in which we shouldn’t operate. The processes and requirements for estate wineries and wine making, production services and other custom crush offerings and several of our independent DTC operations are very dissimilar and require different capabilities. The actions we are taking now are the initial steps to streamlining our business model and operations as we develop a long-term strategy for building a select portfolio of nationally recognized brands.” The Company plans to simplify its DTC operations to concentrate resources on certain Super Premium+ estate wineries. VWE also plans to monetize its Clos Pegase winery and tasting room in Napa and its Viansa property in Sonoma. It also will look to wind down certain custom crush and B2B services while evaluating its array of production services businesses and the contributions of each. Its priority brands will include a number of Super Premium+ estate brands and the select lifestyle brands of Layer Cake, Bar Dog, Cherry Pie and ACE Cider. The Super Premium+ estate priority brands will include Girard, Kunde, B.R. Cohn, Laetitia and Firesteed, among others. Mr. Kaufman noted, “We expect this intense focus of our resources will enable us to create stronger brand desirability that can be leveraged to drive greater wholesale throughput across on-premise and retail, creating a marketing discipline which provides enhanced opportunities for our distribution partners.”