Chocolate retailer Thorntons has seen total revenue for its fourth quarter increase by 7.8 per cent to £24.7 million, according to figures released today.
Like-for-like (LFL) sales over the nine weeks to June 30th 2012 rose 0.7 per cent, the first rise in LFL for the group since 2010, provided a ray of light for the troubled retailer.
Commercial sales grew by £2.9 million over the period, boosted by the introduction of the specialists’ ‘Best of British’ summer range, an initiative aimed at driving customers in store throughout the year to avoid over-dependence on a pre-Christmas rush.
From a commercial perspective, sales soared by 42.6 per cent over the quarter and up 7.4 per cent for the 53 weeks to June 30th.
Commenting on the results, Thornton’s CEO Jonathan Hart noted the importance of remaining vigilant about the state of the market.
“Although we are encouraged by this performance, this nine week period contributes less than 12 per cent to our annual sales and we continue to remain cautious about the outlook for the coming year,” Hart said.
“Trading initiatives in our Own Stores, implemented since our strategic review, combined with new product launches have led to some improvement in underlying sales.”
Full year results were disappointing as total retail sales plummeted 6.5 per cent while own store sales reported a 7.1 per cent decrease.
Franchise sales were similarly lack-lustre, declining to £0.9 million over Q4 following the administration of greetings card specialists Clintons Cards , as Thorntons had franchises in dozens of Birthdays and Clintons stores.
During the year, Thorntons closed 36 of its own stores in keeping with its pre-determined strategy and 46 franchises and Neil Saunders, Managing Director at analyst firm Conlumino, believes that such changes indicate a new direction for the brand.
“We hold to the view that Thorntons is still right to moderate its store portfolio, especially as it ramps up wholesale and commercial sales,” he explained.
“Longer term our view remains that Thorntons is fast moving away from being a retail brand and is becoming much more of a mid-market player in terms of positioning.
“These adjustments are causing some short-term pain to the business but are a necessary adjustment for long-term survival.”
While Hart did not allude to such a significant change in direction, he noted that the retailer’s ongoing commitment to modernisation remains strong.
“We remain committed to our strategy of rebalancing our business, revitalising our brand and restoring profitability and I am pleased to see that the actions we have taken are starting to deliver improvements in a difficult trading environment,” he said.