Virgin Wines' UK business in £14m management buyout

(TheGuardian) - Virgin Wines' UK business has been bought out by its management as former owner Direct Wines focuses on overseas expansion.

The management team, led by Jay Wright and backed by private equity funds Mobeus Equity Partners and Connection Capital, has paid around £14m for the business.

Sales at the UK business totalled £35m in the year to June 2013, and Wright said the plan was to build on growth achieved since he took charge in 2008, targeting £50m of sales over the next four to five years.

Wright founded Warehouse Wines in 2000 and sold it to Direct Wines in 2002, before merging it with Virgin Wines in 2008.

He said that while the management and owners of Direct Wines had been supportive, "my passion is to work for myself.

"It's a fabulous opportunity to do everything the way we want to do it. Strategically we are looking at much faster growth," he said.

Plans include an extension of its "try before you buy" offering through wine tastings.

Virgin Wines employs around 160 people in the UK, with a distribution and packing operation in Preston and back office functions in Norwich.

Simon McMurtrie, chief executive of Direct Wines, said the group would now focus on expansion in the United States and Australia, as well as on its Laithwaite's Wine business in the UK. Direct Wines was founded by Tony Laithwaite in 1969 and is still family-owned. It has annual sales of around £350m.

"The board of the Direct Wines group and our shareholders, the Laithwaite family, want us to accelerate our growth in the US, Australia and in our core Laithwaite's Wine business in the UK and that is where we are now focusing our investment," McMurtrie said.