Chocolate retailer Thorntons today reported a profit fall of 79 per cent to £900,000 for its full financial year though revealed plans to unveil a new brand identity next year in the hopes of reversing its fortunes.
Sales dropped 0.5 per cent to £217.1 million in the 53 weeks to June 30th 2012, while total retail sales which include own stores, franchises and its online offering Thorntons Direct fell 5.2 per cent to £132.1 million.
Overall own store sales decreased 5.8 per cent to £111.4 million compared to last year while franchise sales declined 7.8 per cent to £10.7 million, affected by the administration of franchise partner Clinton Cards in May.
Such negative figures emphasise the struggles of the sector, explained Chairman John von Spreckelsen.
“During the past year Thorntons has continued to operate in a difficult trading environment as the UK economy moved into a double-dip recession,” he said.
“We maintained production volumes and grew our market share in an overall weak marketplace. This was, however, achieved at the expense of margin and as a result profitability was affected in particular during the first half of the financial year.
“We have taken actions to improve margins and the second half of the financial year saw encouraging year on year improvements.”
Over the period, the chocolatier closed 36 own stores at a cost of £1 million and is on track to reach its closure target of 120 over three years.
It is hoped that Thorntons will build its relationship with major grocers, which have proved firm rivals over the busy Easter and Christmas periods.
CEO of Thorntons Jonathan Hart believes that the retailer‘s long-term strategy will improve its standing by rebalancing its portfolio, revitalising the brand for cater to a year-round chocolate gifting market and restoring profitability to remain competitive.
“We have made good progress in implementing this three-year plan,” Hart said.
“The past year has presented many challenges but we have been encouraged by the way in which the business has demonstrated its ability to cope with these difficulties.
“I am confident that the core direction of our strategy is right.”
It was also announced today that von Spreckelsen, who announced plans to retire last September, will remain in his post until February 2013, after which current Senior Non-Executive Director Paul Wilkinson will succeed him.