A BRIEF TIMELINE
1911: Thorntons was founded in Sheffield by Joseph William Thornton and his son Norman as a chocolate brand.
Thornton co-opened the company’s first shop at 159 Norfolk Street. Norman was appointed manager at just 15, when Thornton handed over the keys and told him to “make this the best sweet shop in town”.
1913: The Thorntons opened a second store which included a kitchen where they began making their own hand‐made chocolate truffles, crystallised fondants and special toffee.
1919: Joseph Thornton died and Norman took over the family business of five stores.
1921: Norman brought in his brother Stanley – who had studied food science at Sheffield University – to take care of manufacturing and help with the expansion of the business, as the company incorporated as JW Thornton Ltd.
1927: JW Thornton opened its first factory in Sheffield.
1928: The company opens three more stores outside of Sheffield.
1935: The number of the company’s stores topped 15.
1938: JW Thornton expanded beyond the Midlands region into the North of England, with 35 stores in 18 cities.
1954: Thorntons hired a Swiss chocolatier to begin producing Swiss chocolates. The Continental Assortment became a fixture on the Thorntons product list. Originally named Swiss Assortment, the name was changed after complaints from the Swiss embassy.
1957: The Thornton brothers continued to lead the company. The third generation of the Thornton family, including Michael Thornton, joined the board and remained active in the company’s affairs until the end of the century.
1960: JW Thornton opened its 200th store.
1982: The Thorntons added another family member, John Thornton, as managing director.
1987: Joseph Thornton’s grandson Peter Thornton was dismissed as chairman in June. John Thornton took on the roles of both chief executive and chairman.
1988: JW Thornton was listed on the London Stock Exchange, sold 25 per cent of its shares, and changed its name to Thorntons.
1995: John Thornton retired as managing director and hired Roger Paffard to replace him.
1996: Thorntons exited the French and Belgium markets. Thorntons said it was unable to penetrate these markets as it “did not invest enough time and effort to understand the differences between the UK and the French and Belgian markets”. Instead, it began focusing on expansion plans in the UK, led by Paffard.
In October that year, Thorntons announced plans to step up its number of new stores, backed by a £30 million investment program, with the intention of opening 90 new stores by 2000.
1997: Thorntons revealed further plans to open its 500th store by the year 2001. In order to reach this goal, the pace of new store openings went into overdrive.
1998: Thorntons announced plans to open as many as 100 stores. The business hit difficulties that saw its share price plunge from a high of nearly 300 pence to as low as 85 pence.
1999: Thorntons launched new in-store coffee shops and cafes. It also ran out of stock during the crucial Easter season – sending customers to its competitors. By May, the retailer was forced to make its first profit warning.
2000: Peter Burdon joined as chief executive. Thorntons rolled out a range of novelty products such as chocolate-scented t-shirts and body lotions. It also pressed on with new store openings and retail channels.
However, Thorntons said its efforts to think outside the box were unable to stop profits from sliding. Another Easter stock error saw the retailer having to discount some £1.4 million of unsold Easter eggs. This led to Thorntons making its third profit warning in 18 months. Sinking profits continued to affect its share price, sparking fears that the retailer might offer itself up as a takeover target. John Thornton consequently asked Paffard to resign in March.
By the end of the year, Thorntons had succeeded in stabilising its profits, and returned to sales growth.
2001: Thorntons launched a new line of own-brand desserts as well as boxes of chocolates to be sold in supermarkets and began trialling pastries. Despite the renewed optimism, share prices continued to fall. The retailer was valued at just £56 million, compared to a high of nearly £400 million. By August, Thorntons was mulling a management buyout to remove it from the stock market or a takeover.
2005: Barry Bloomer was appointed Thorntons chief executive.
2006: In June, John von Spreckelsen was hired as Thorntons chairman in a bid to revive its fortunes. Mike Davies was appointed chief executive. In September, Thorntons posted pre-tax profits of £5.2 million for the year to June 24 compared to £8.1 million in 2005. Like-for-like sales fell 3.7 per cent over the year although the sales reduction slowed in the second half to 1.8 per cent. Spreckelsen said at the time that Thorntons would invest £1 million in the upgrade and refurbishment of its stores over the next year.
2007: In April, Thorntons set up a rare edible billboard, which exceeded four metres length and weighed 390kg. The structure included 10 chocolate bunnies, 72 giant chocolate eggs, and 128 chocolate panels, each weighing 2kg. It was framed outside its Covent Garden store in London, and was eaten within the space of just three hours.
2010: Davies stepped down as chief executive.
2011: Caffe Nero managing director Jonathon Hart joined Thorntons as chief executive. In May, the Thorntons brothers delivered a scathing attack on management for “wrecking” the 100-year-old retailer. In June, Thorntons announced it would close between 120 and 180 of its shops, resulting in the loss of 1200 jobs. By December, Thorntons dismissed any hopes of making a profit as poor sales continued, prompting a further reduction in margins to try and boost business.
2012: In September, Thorntons reported a profit fall of 79 per cent to £900,000 for its full financial year. Sales dropped 0.5 per cent to £217.1 million in the 53 weeks to June 30, while total retail sales which include own stores, franchises and its online offering Thorntons Direct fell 5.2 per cent to £132.1 million. Store sales dropped 5.8 per cent to £111.4 million compared to 2011 while franchise sales declined 7.8 per cent to £10.7 million, which Thorntons said was affected by the administration of franchise partner Clinton Cards in May that year.
2013: Thorntons’ total sales rose four per cent to £60.6 million in the 14 weeks to April 20, which the retailer attributed to strong sales of Easter products. Thorntons also revealed it closed down nine stores as part of its turnaround strategy.
2014: In July, Thorntons closed 36 stores to “rebalance” its business. In October, Thorntons sales dropped by 12.8 per cent in first quarter sales, while profits fell 10.9 per cent to £20.6 million. Like-for-like sales have fell by 3.7 per cent since Easter and franchise sales dropped by 19.1 per cent due to timings of orders.
2015: In January, Thorntons closed four stores and relocated two others. It was also forced to temporarily shut its London Oxford Street flagship by Westminster Council after an inspection revealed an rodent infestation. In March, rival chocolate retailer Hotel Chocolat’s profits overtook Thorntons for the first time, indicating a shift in consumers’ taste. Thorntons’ trading update that month saw pre-tax profit fall by 8.8 per cent to £6.5 million, while sales were down 8.2 per cent to £128.2 million for the second half of 2014. Hart said at the time he remains “cautious about the outlook for the full year”.
In June, Thorntons was bought by the Italian manufacturer Ferrero Group for £112 million. Thorntons was 75 per cent owned by Ferholding UK, which in turn is controlled by Ferrero executive chairman Giovanni Ferrero who held over 50 per cent of the voting rights.
2016: In May, Thorntons announced it was poised to shutter its Oxford Street flagship store as new owner Ferrero continued a review of the business.
2021: In March, Thorntons announced plans to permanently close its entire UK store estate of 61 sites, affecting 603 workers. The chocolate retailer said its decision is currently the subject of consultation with employees, and hopes to redeploy some of those affected.
Thorntons said the Covid-19 pandemic had affected trading, particularly due to lockdown restrictions. It added that online sales would be a key part of its strategy after it recorded a 71 per cent rise in ecommerce sales in the last year.
THE REASONS
“In Chocolate Heaven Since 1911”. This particular slogan was created by Thorntons founder and confectionery salesman Joseph Thornton as he set out to launch “the best sweet shop in town”.
In recent years though, Thorntons has arguably discovered to its cost that chocolate in Britain is no longer just about chocolate, but more about experience.
As rival British confectionary retailer Hotel Chocolat has demonstrated, offers such as a subscription box service, a diverse core product offering such as coffee and alcoholic drinks, and an ethical business model named “Engaged Ethics scheme” have been proving popular with consumers. It recently posted an 11 per cent sales rise to £101.9 million in the second half of 2020 ending December 27, compared with the first half.
Thorntons on the other hand has been struggling with its profitability since the late 1990s. The retailer’s difficulties saw its share price plunge from a high of nearly 300 pence in 1998 to as low as 85 pence at the turn of the century.
Last week, Thorntons announced plans to become an online-only retailer and permanently close its entire UK store estate of 61 shops, which will affect 603 workers. The chocolate retailer said the Covid-19 pandemic had affected trading, particularly due to lockdown restrictions.
The news of Thorntons’ decision to shutter its store estate follows a string of big names to go online-only, such as Debenhams which was bought by Boohoo, and Topshop bought by online giant Asos.
The pandemic has led to a number of retailers struggle to survive against the changes in consumer behaviours – although it’s important to highlight that Thorntons has not filed for either administration nor a CVA. Yet for many retailers, change is inevitable – and always has been prior to Covid-19.
When Peter Burdon joined as chief executive in 2000, Thorntons’ products began to target the high-end market – striving to join the likes of Fortnum & Mason. But even though the Thorntons name is synonymous with chocolate, the family story behind it is anything but sweet.
As the third-generation, former chairman of Thorntons, Peter Thornton spent 35 years working for the family business famed for its “Continental Assortment” selection boxes. However, his career was cut short when, in 1987 he was dismissed by his own brothers following years of family disagreements.
Besides the family feud, increased competition on the high street from Hotel Chocolat meant Thorntons found itself occupying an uneasy middle ground between premium and mass-market appeal.
“Thorntons has failed to invest in its retail business”
Regarding the store closures announced last week, Thorntons retail director Adam Goddard said changing dynamics of the high street, shifting customer behaviour to online, the ongoing impact of Covid-19 and the numerous lockdown restrictions over the last year – particularly during key trading periods at Easter and Christmas – meant Thorntons was trading “in the most challenging circumstances”.
Thorntons added on its website that the store closures came after it had been “operating for a long time in a tough and challenging retail environment”.
“Unfortunately like many other retailers, the obstacles we have faced and will continue to face on the high street are too severe,” the retailer said.
“Despite our best efforts we have taken the difficult decision to go into full consultation to start the permanent closure of our retail store estate.
“As customers continue to change the way they shop, we must change with them. We have seen a strong growth in Thorntons.co.uk and this will remain a key focus for us.”
Thorntons has long been conflicted on how to position its brand to consumers. Since its multi-million-pound acquisition deal with Ferrero in 2015, the retailer introduced itself to UK supermarkets as an affordable mid-range option.
Meanwhile, competition from the likes of Hotel Chocolat and Godiva has manifested the shortages in Thorntons’ offering.
In fact, the competition between Thorntons and Hotel Chocolat was once so fierce that Thorntons’ expert chocolate maker Barry Colenso was forced to resign in 2007 after being caught squashing £63.50 worth of truffles in Hotel Chocolat’s Nottingham store.
Thorntons’ stores were arguably more akin to a discounter and a place for bargain hunting due to its vast discounts, while its offerings in supermarkets gave it a run-of-the-mill effect with its products being readily available. Although Thorntons’ products appeared mass market, its prices still suggested a premium product.
Catherine Shuttleworth, founder and chief executive of retail agency Savvy, argued that Thorntons failed to invest in its retail business, while Hotel Chocolat stepped into the mid-market for luxury chocolate – which Thorntons once occupied.
The Resilient Retail Club founder Catherine Erdly told Retail Gazette that Thorntons was perceived as less premium over time while Hotel Chocolat managed to maintain its premium positioning.
“Thorntons was facing a lack of footfall but on top of that, its store estate needed revitalising, and required investment to update tired stores and implement new formats – which may just have not been a viable proposition for them in the current climate,” she said.
Suzi Bentley-Tanner, strategy director at digital consultancy Engine Transformation, argued that consumers’ shifting desires, such as the appetite for less sugar, organic produce, and sustainability, did not align with Thorntons’ existing positioning.
Paul Morris, European sales manager at Columbian chocolate manufacturer Luker Chocolate, agreed with Bentley-Tanner. He said customers wanted to shop with retailers that offer unique, healthy options, utilising alternative sugars to produce the same high-quality product.
“In the UK market and across the globe, we’re seeing more conscious consumers – both in terms of health and sustainability considerations,” he explained.
“If Thorntons wants to remain relevant and thrive in a post-pandemic world, they mustn’t forget who lies at the heart of the business – the customer.
“They must continue to deliver conscious, high-quality produce. Supermarket own brands are a very good at this; you can see this through their development of high-quality Easter eggs over the years.
“Ten years ago, consumers would have had to visit their local chocolatier to purchase a luxury Easter egg. Now, we’re seeing supermarkets offering a wide range of premium products, using single origin ingredients and alternative sugars to help satisfy the needs of the modern customer.”
“Consumers’ shifting desires do not align with Thorntons’ existing positioning”
Chris Elliott, head of market insights at ecommerce provider Edge by Ascential, argued that if Thorntons wanted to get ahead, it must show that it can adapt to changing consumer shopping habits by focusing on ecommerce. He also highlighted that Covid-19 was not the main factor in Thorntons’ store closures. Rather, it was the “final nail in the coffin”.
“The high street was suffering declines in footfall before the pandemic and more shoppers looked online, a trend that has only been accelerated by Covid-19,” Elliott said.
Elliot also said Thorntons failed to embrace key partnerships with retailers – especially with the likes of Amazon, Ocado and John Lewis – which Hotel Chocolat has already established.
“This meant that Hotel Chocolat has not only weathered the pandemic but actually seen sales growth as its online sales trebled due to it adding 600,000 new online customers,” he explained.
Erdly said there was no reason why Thorntons could not continue to trade in the UK.
“It does have a substantial online business as well as a presence in many supermarkets and has really widened its distribution over the years so there’s no reason why the retailer shouldn’t continue even if the stores are no longer trading,” she told Retail Gazette.
Erdly went on to predict that some bigger retailers with vast store estates may now be re-evaluating their physical retail space following the recent news from Thorntons.
“It wouldn’t surprise me if we saw more reduction in store numbers and more store closures,” she said.
“What we don’t know yet is how many people will come back to shopping in physical stores at the end of the pandemic – there could well be a pent-up desire to visit physical stores.”
Indeed, as non-essential retail across the UK reopens at different times in the coming weeks – should Covid-19 permit – there may be pent-up demand and a revitalisation of bricks-and-mortar.
However, Thorntons’ decision to go online-only could have come as a result of the increased shift to digital shopping amid the pandemic. In addition, Thorntons’ bricks-and-mortar estate has been in decline for over a decade, with only 61 stores last week compared to the 364 it had in 2011.
It’s crucial to remember that this isn’t the death of Thorntons as a brand. In addition, the heritage and renown the brand carries could bode well for the confectioner as it turns its focus to ecommerce. Yet in order to succeed, a clear analysis of its brand positioning in today’s retail climate is crucial.
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