Vintage Wine Estates Restructures Organization, Initiates Cost Cuts and Simplifies Business Model

Vintage Wine Estates, Inc. (Nasdaq: VWE and VWEWW) (“VWE” or the “Company”), one of the top wine producers in the U.S., today 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 $7.1 million. Restructuring charges for the actions are expected to be approximately $1.5 million, 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.

“We need the resources to execute our plan and have engaged Oppenheimer & Co. to help accelerate our efforts to monetize certain assets that we do not see as part of the reimagined VWE. These include select luxury estates, some premium price-point and below wine brands as well as certain production services and some DTC platforms such as digitally-native brands and telemarketing. These efforts will help us pay down debt and we expect will enable investments to drive a step-change in consumer-centricity and commercial discipline.”

Restructuring to Simplify the Business

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.