Healdsburg wine company Truett-Hurst sells off wholesale business to Seattle firm

Truett-Hurst Inc. announced Monday it has sold its wholesale wine business for $18 million and will focus solely on its direct-to-consumer business.

The Healdsburg wine company sold its wholesale business - including such brands as Sense and Colby Red, largely sold at national supermarket chains - to Seattle-based Precept Brands. Once the deal is completed, Truett-Hurst will keep its namesake label and VML wine brand; its 23-acre vineyard; and two tasting rooms on Dry Creek Road.

The sale will give the company $5.6 million in cash, which it will use to pay off its debt, invest back into the business and possibly provide returns to its stockholders.

Phil Hurst, the company’s co-founder and chief executive officer, will leave Truett-Hurst and take a new position as chief innovation officer at Precept Brands. Hurst, who also co-founded Winery Exchange in 1999, is a longtime veteran with experience in creating private labels for national retail chains.

Paul Dolan, a veteran North Coast winemaker and a Truett-Hurst co-founder, will become the company’s interim CEO as of Nov. 1.

“Right now, we are feeling bullish,” Dolan said. “We are a strong company and we got great brands.”

In its latest filing with the Securities and Exchange Commission, Truett-Hurst reported net sales for its wholesale business increased 22 percent for the first three months of 2018, while its direct-to-consumer business increased 21 percent.

The sale is the latest notable chapter for the company founded in 2007 by Dolan and Hurst. In 2011, they teamed up with renowned investor Bill Hambrecht to take the company public in an ambitious plan to grow in the multibillion-dollar wine marketplace.

The company went public in 2013 with the stock trading at $6 a share.

But in the aftermath, the winery encountered numerous problems, which included a bitter lawsuit between Hambrecht and the other investors; manufacturing troubles that ultimately killed off its Paper Boy brand packaged in cardboard with a plastic liner; and an ill-fated push into the wine spritzer category.

On Monday, the stock closed at $1.48 a share - up four cents from its opening earlier in the day.

Dolan said there are no current plans to take the company private again. “We are traded publicly and will be for the foreseeable future,” he said.

You can reach Staff Writer Bill Swindell at 707-521-5223.