Interview Transcript

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We read your profile and thought you'd be a great person to speak to because of your background, not only with Naked but also Virgin and your experience with Australia and the US. Naked has gone through a bit of a roller coaster ride and you've been through most of it; how was your experience there and what was your reason for leaving?

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The idea with Naked is that it should own more of the margin in the value chain. That brings me to my view on your question about the margin at Naked, who are not charging enough for the wine. The cost of production, the COGS, are lower, but they chose to pass on the savings to the customer in the form of lower prices; they're scared stiff of raising prices. If you compare the pricing to the rest of the market, it's exceptional value.

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Is this in the US or are you talking about abroad?

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They were also building a team in Denver, Colorado, which made absolutely no sense, and they wanted me to move. I'd done 13 years at the company, so he gave me some time to think about what I wanted to do. He knew I was frustrated and I'm sure they were also frustrated with me. By the end of that paternity leave, I decided to stay in New York and leave the company. It is a coincidence that my last day was the peak of the share price, and we all know what happened after that.

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Thanks for that intro. There's a lot of threads to pull on there. I think a couple of things which were not on the list which you mentioned, one about the culture in the US and why it was tough to hire people, and it sounds like you didn't agree with the way Nick and Shawn were leading the companies, so could you expand on those two things which may be linked?

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From a culture perspective, it's always worrying when you think you're something that you're not. I even see it in their investment case, entrepreneurial, nimble, quick to market. A lot of it is to do with technology. They have a humongous weight around their neck because we built a lot of the tech ourselves in 2008, because there was no Shopify or a Software-as-a-Service industry. There is no documentation and everybody has left. They are terrified of changing anything in fear of it breaking. When you're not performing, all of a sudden, we had better not go further backwards and change this, because if we squeeze this part of the balloon, we don't what will happen over here. Look at how much cost they're carrying; their G&A is nuts.

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