// Thorntons former chair Paul Wilkinson condemns Ferrero’s management of the retailer
// Ferrero announced last week that the remaining 61 Thorntons shops would not reopen
// Thorntons will become a digital business
Thorntons former chair Paul Wilkinson has reportedly criticised Ferrero Group’s management of the chocolate retailer as the business recently decided to shutter its store estate.
Ferrero announced last week that the remaining 61 Thorntons shops would not reopen when lockdown lifts next month, affecting 603 jobs.
Thorntons will continue to trade online and sell its products in supermarkets and other retailers, with the 104 franchise stores also remaining open.
Wilkinson was chairman of Thorntons in 2015 when the company was sold to Ferrero for £112 million.
He said the new owners “failed to understand the business model”.
Wilkinson added that Thorntons is a vertically integrated business and requires critical mass for the economics to work, The Grocer reported.
“I’m surprised Ferrero did not keep some of the best stores open to simply act as brand ambassadors. The good stores were always very profitable,” he said.
Ferrero has invested £45 million in Thorntons since the takeover, made up of £35 million in the factory and to develop the business in grocery channels and online, as well as £10 million to improve store layouts and convert seven shops to an upmarket café format.
It also invested £170 million of share capital to boost the financial structure of Thorntons, following a reduction in its retail estate.
Since Ferrero’s takeover, Thorntons has reported losses of up to £130 million.
Ferrero now plans to focus on Thorntons’ online business as consumers shift to digital shopping amid the crisis.
Thorntons has experienced growth of 71 per cent in digital net sales over the past year, with more than three-million customers using its online shop.