Chocolate retailer Thorntons looks set to change the shape and size of its own store portfolio following consistently poor trading levels from this part of its business.
A statement released by the company today said that own store sales on the high street have continued to be weak since the firm published its second quarter financial results on January 13th.
Meanwhile in the 28 weeks to January 8th own store sales declined 5.9 per cent to £74.1 million, and they were down 5.2 per cent on a like-for-like basis.
Thorntons also acknowledged that it expects trading in these shops to be difficult during the remainder of its financial year, but revealed that “a significant number” of the leases on these stores are approaching renewal, presenting the opportunity for structural reassessment.
Whether it results in store closures or a different change of strategy, any move would be made against a backdrop of increased revenues and falling profits, reported by the company today.
Over the 28-week period group revenues increased by 4.8 per cent to £133.5 million, but profit before tax dropped 8.5 per cent to £8.3 million as adverse weather conditions in Q2 affected its bottom line. Supply chain disruption also caused incremental costs of £500,000.
Ex-Managing Director of Caffe Nero Jonathan Hart will be the man tasked with leading any change of direction at Thorntons, having joined the company as CEO at the start of January, although he will be comforted by the fact some parts of the business are performing strongly.
John von Spreckelsen, Thorntons’ Chairman, said: “Looking forward, we believe that we are well placed to continue to grow our Commercial, Franchise and Thorntons Direct operations.
“The board anticipates profits before taxation and exceptionals to be around the level reported last year (£6.1 million). The interim dividend is being maintained at 1.95p.”