Lot18 closes UK business

New York-based online wine retailer Lot18 has closed its UK operation just four months after launching. As reported on db.com, the members-only website shut its London office on Friday and will suspend all UK operations at the end of July. In a statement issued by the company, the closure was blamed on the dominance of supermarkets in the UK.

“Lot 18 has decided to close its operations in the UK at the end of this week. Unfortunately, the supermarkets’ stranglehold on the UK market proved too powerful for us to compete with and we have not experienced the anticipated growth rate,” it said. Supermarkets account for 80% of the UK wine market and have recently expanded online.

“Lot18 has just under one million members and just sold its millionth bottle,” the statement added. Six full-time employees will lose their jobs as a result of the London closure. Lot18's New York office made 10 employees redundant in early June. The company also recently closed its food division, Lot18 Gourmet, and its food and wine-themed excursion business, Lot18 Experiences.

The London branch opened on 2 March, with general manager for Europe, Will Armitage, saying the firm hoped to recruit a million members in the UK. Founded in 2010 by Philip James, founder of wine ratings and reviews site Snooth.com, the company raised US$45m in venture capital funding last year.

Lot18 reportedly generated US$25m in sales in 2011 and was expecting that figure to double in 2012. The company will remain active elsewhere in Europe, South America and Australia. Lot18 sources fine and rare wines worldwide for limited-time offers, which typically last only 48 hours. It specialises in sourcing rare single bottles. When contacted by Wine and the City, Philip James was unavailable for comment. 

Lot 18 goes live in the UK

The UK website of New York-based online wine merchant Lot 18 has gone live. As reported on thedrinksbusiness.com, Lot18.com, which launched in the US in November 2010, sources fine and rare wines worldwide for limited-time offers. Aimed at “aspiring wine connoisseurs looking to expand their knowledge,” the members only site, which raised US$45m in venture capital funding last year, has over 800,000 US members and 120,000 French members.

Working with over 550 wineries, offers on the US site typically last only 48 hours. Co-founder and president Philip James – who also founded wine ratings and reviews site Snooth.com ­– expects to build the UK site to 200 wineries in the next six months, but is keen not to inundate members with offers. “I thought it would work because your typical wine merchant is stuffy and intimidating for the average wine consumer. There’s also far too much choice. By telling us a bit about yourself we can cherry pick wines to suit your specific palate,” James told me at the London launch at Quo Vadis in Soho on Thursday.

“I chose the name because 18 is the legal drinking age in the UK – where I’m from, and it’s also considered a lucky number, meaning “lucky purchase” in Cantonese and “life” in Hebrew. I wanted it to evoke the excitement felt when winning an auction lot,” James added. With a constantly revolving stock, the site specialises in sourcing difficult-to-find parcels and prides itself on offering rare single bottles for sale.

Wines range from £10-100, but James (far left) calls the £10-20 bracket the site’s “sweet spot.” “We’re very much pushing the ‘get it while it’s hot’ idea to keep the excitement up. Our offers are only around for a couple of days, so when they’re gone, they’re gone,” he said. The UK site has launched with offers including Château Pontet Canet 1995 at £90 per bottle and Rubicon Estate Blancaneaux 2009 from Francis Ford Coppola’s Inglenook Estate in Napa at £42.50.

Wines from all around the world will be represented, with a strong leaning towards California, Washington, Oregon and the Finger Lakes in New York. The company’s buying team is made up of 15 sommeliers and Master of Wine students operating worldwide, who source wines for all three sites. James is looking to launch the site, which also offers gourmet food and epicurean-themed travel, in Germany, Spain and Northern Europe in the near future. Membership to Lot18.com is free.