Thorntons turnaround strategy sees PBT soar 71%

Chocolate retailer Thorntons reported a 2.9 per cent sales increase to £133.7 million in its first half as a rebalancing of the business begins to bear fruit, it has been announced today.

Pre-tax profit soared 71 per cent in the 28 weeks to January 12th 2013 to £5.3 million while the specialist retailer saw “significant market share gains” in the UK market.

Internationally, sales grew 57.7 per cent to £4.1 million while Private Label sales rocketed 387 per cent to £3.9 million over the period.

However, own store sales plummeted 8.3 per cent on the same period last year as a further 13 store closures were completed in line with the retailer‘s long-term turnaround strategy.

Like-for-like sales fell 1.5 per cent and franchise sales declined 25.4 per cent to £5 million following the administration of primary franchisee Clinton Cards last May.

Online sales also struggled as Thorntons Direct reported a sales decrease of 11.9 per cent to £5.9 million due to “operational issues in the peak selling period.”

Experts have warned that the retailer must focus on profitability in the current climate and analyst Bethany Hocking of Investec Bank noted that the coming months are crucial for Thorntons.

“Easter remains key,” Hocking explained.

“Trading since the 19th January statement has been in line with expectations.

“As ever for Thorntons, trading over Mothers‘ Day and Easter will define the full year outcome.”

Jonathan Hart, Thorntons‘ CEO, acknowledged the importance of upcoming events though said that results thus far have been promising.

“We are encouraged by the overall progress we made during the first half of the year.

“This performance demonstrates that our strategy is generating results as we continue to rebalance the business, revitalise the brand and restore profitability.

“Whilst trading since the period end has been in line with our expectations, we look forward to our important spring trading seasons of Mothers‘ Day and Easter which will be key to the outcome of the full year.

“We have strong trading plans in place and exciting new products across all channels.

“We are confident in the actions we are taking but remain cautious given the continuing challenge of the economic climate.”


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