UK fine wine merchant Armit Wines is set to post a “significant” improvement in the financial year, after a three-year turn around of the business.
Speaking to The Drinks Business last week, Armit’s managing director Brett Fleming said that the fine wine supplier was in a far healthier place than it had been for a number of years.
“Armit’s situation has been well documented over the years and there have been lots of rumours, half of which are not true, but some had truth in them,” he admitted.
Shortly before Fleming joined the business in November 2019, the company had posted a £500,00o loss however over the following 12 months, this was turned into a “modest” £320,000 profit.
“The key point there is that we had a £850,000 swing right in the middle of Covid, when everything was shut down,” he points out. This, he notes, was before the industry had “found a way to live with” the reality of trading in a pandemic and navigating the various different lockdowns.
This year the company will reveal a “significant improvement” on that £320,000 profit, largely due to the cultural change at Armit over the last two years, he said.
“When you sell Château Lafleur, Pomerol, and Sassicaia, you’re really allocating those rather than selling them, and that is a different mindset to how you manage a commercial business,” he explains. As a result, there was a certain amount of “poor behaviour” that needed to be addressed.
“I brought very good people in to manage key part of the business to help to get a better performance, not just to our investors, but for our suppliers, so our producers benefit is enhanced if I improve how we sell our customers wine through the portfolio – not discounting, if you want to buy the wine you pay for it,” he said.
Growing the business
In terms of the fine wine sector, Fleming says Armit is both “dominant and growing” already at £22-23 million a year and hoping to get to £30million in the next three-four years, and ultimately £50million.
In order to reach this ambitious goal, the team are already increasing the footprint of each supplier. “Instead of selling three wines from one producer to one customer, I want to be selling five wines from that producer to ten customers – and we’re having significant success with that,” he explains.
Following a rationalisation of the portofolio, Armit is once again on the acquisition trail, having identified some gaps in the portfolio for producers who compliment the current portfolio, and add to its kudos.
“That is a bit of a long time line as producers don’t like to jump ship that easily – and I have to prove to them that Armit is worthy to join and why they should take risk to join us at Armit. And for those that aren’t represented already, we need to take time to get them established, which can take anywhere from 12-18 months.”
Fleming notes that while Armit’s “DNA will always be Italy”, the team are looking outside of Italy to build Armit into “an iconic destination for producers.”
In July 2017, the company was bought by French company InVivo Group as part of its acquisition of Armit’s owner, Dutch company Baarsma Wine Group from private equity firm AAC Capital Partners.
