The publicly-listed company flagged the gravity of its current situation in a quarterly results filing earlier this month. Sales from the three months to the end of March – VWE’s fiscal third quarter – tumbled by just under 30% to US$45.7m with year-to-date sales down 15% at $186.9m.
The filing listed the moves taken in recent months, including the identification of assets such as the Clos Pegas and Viansa businesses for divestment, which are expected to complete within the next 12 months. Other measures have included the recruitment of then-Moët Hennessy North America CEO Seth Kaufman as group CEO last year and a full restructure to prioritise its super-premium portfolio.
Despite this, VWE was frank in its admission of bleak prospects. “Our management has identified that there is a substantial doubt about our ability to continue as a going concern,” the company said.
“We may not be able to repay, refinance or restructure our substantial indebtedness owed to our lenders, which would have a material adverse effect on our financial condition and may cause us to seek bankruptcy protection.”
The combination of “plentiful yields from the 2023 California grape harvest as well as an oversupply of bulk wine in the Pacific Northwest” has coincided with a “reduction in demand for our wine”, the group added.
