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Thorntons Hails Christmas Sales As Business Overhaul Continues

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THORNTONS SALES RISE
Thorntons sales rise for the end of 2012, and the crucial Easter season is still ahead | Alamy

Did you buy some chocolates in the supermarket or a petrol station over Christmas? You weren't alone - figures released by chocolate retailer Thorntons showed its commercial sales grew by 26.4% to £34.7 million.

Thorntons' market share of the 'total boxed chocolate' segment also increased from 11.7% to 12.1%, with its share of the 'Inlaid Boxed Chocolate' market also increasing from 33.5% to 35%.

This was despite retail sales from its own stores falling by 1.3% in like-for-like sales, due partly to it having 27 fewer stores than during the same period in 2011.

Franchise sales also took a £1.1m hit due to the card retailer Clintons, a major partner of Thorntons, going into administration. Web sales experienced some operational issues, resulting in a 13% sales decline year-on-year, but international sales grew by 69% to £2.1m.

Chief executive Jonathan Hart said in a statement: "These results demonstrate the effectiveness of our multi-channel distribution model and our strategy to rebalance our routes to market and revitalise the business as a whole. We have grown market share and demonstrated the continued strength of the Thorntons brand despite a challenging economy and a weak confectionery market.

"Our important spring seasons, in particular Easter, lie ahead of us and will be key to the outcome of the full year. We have strong trading plans for spring and an encouraging commercial order book. We are confident in our strategy and the actions we are taking but remain cautious given the continuing challenge of the economic climate."

HuffPost UK spoke to Hart in the run up to the crucial Christmas period, when he was bullish that the turnaround plan for Thorntons was working.

"We've focused on working with our existing customers, of which there are many, with an aim to encourage them to buy once more a year than they normally would," he said.

"Supermarkets are where people are shopping for chocolates; we haven't created an inferior product, it's still the same idea of an affordable treat for the working man and woman that we started with. We're a step above the mass market brands - I see the brand sitting in the same bracket as Green and Blacks, Lindt, Ferrero and the sort."

Speaking about Wednesday's results, Investec's Bethany Hocking said in a statement to investors: "This was a good Christmas for Thorntons, and the continued outperformance of Commercial, together with some encouraging signs in private label and international, are evidence that the strategy is working.

But Nick Hood, business analyst at Company Watch, was less impressed, telling HuffPost UK: "It was quite difficult for shoppers to get to the check outs at supermarkets and petrol stations this festive season without falling over a stack of heavily discounted Thorntons' products, so an improvement in overall sales and an increase in market share for boxed chocolates was hardly surprising.

"More interesting will be the impact on profit margins and brand value in a market increasingly differentiating between luxury offerings such as Hotel Chocolat and long established value products. Thorntons is a company in transition from multichannel confusion to a much more focussed business model. But it is progressing this turnaround from a weak financial base."

Around the Web

Thorntons - Telegraph

Jubilee fails to halt Thorntons sales dip - FT.com

Thorntons continues store closure programme - FT.com

BBC News - Thorntons sees sales rise amid cost cutting

Thorntons chocolate sales rise over holiday season

BRIEF-Thorntons's total sales up 5.4 pct in Q2