// Hotel Chocolat swung to a pre-tax loss of £9.4 million in the year to late June, down from a £3.7 million profit a year earlier
// Despite this, UK store sales were 23% higher than the pre-pandemic year of 2018-2019
Hotel Chocolat swung to a £9.4m from a £3.7m profit last year but said that “people are still treating themselves with affordable luxury” despite the ongoing cost-of-living crisis.
“It goes without saying that the current environment is challenging on multiple fronts,” said Angus Thirlwell, co-founder and chief executive of Hotel Chocolat.
The retailer said it would cut back on discounts this Christmas as a result of the slump, which it attributed to one-off charges due to US store closures and the restructuring of its Japanese joint venture.
The business said without the Japanese impairments, and other one-off charges, its pre-tax profit reached £21.7 million.
Despite the slump in profits, the chocolate specialist’s UK sales rose 35% on the year as UK store sales were 23% higher than the pre-pandemic year of 2018-2019.
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The group is about a third of the way through its current trading year, with retail trading in line with last year, but online and wholesale sales lower.
The retailer is also adopting a deliberately prudent approach to the outlook on trading, manufacturing controlled levels of seasonal inventory with a strong focus on self-help actions to mitigate inflationary pressures.
“As can be imagined, we have asked ourselves many questions as to how we could have done this differently,” the business said on Thursday.
“The size of the prize in Japan certainly sustained our risk appetite through the three increasingly difficult years of Covid, alongside the loyal enthusiasm of our Japanese fans for all things Hotel Chocolat.”
Thirlwell said the performance of retail stores was continuing to beat pre-Covid levels and subscriptions are in growth.
“We have reduced online marketing spend resulting in lower volume, but higher quality full-price sales. Our wholesale partners are also showing caution too.
“The Hotel Chocolat brand has huge resonance with shoppers and despite the macro-economic environment, people are still treating themselves with affordable luxury and remaining loyal and we are winning new customers who recognise our quality.
“We remain fiercely ambitious for the Hotel Chocolat brand for growth in both UK and international markets. Our new stores showcasing the format of the future opened in Norwich and Northampton and are trading very strongly. Internationally we intend to utilise more risk-contained techniques to capitalise on the proven brand appeal in major international markets. We will update on developments in due course.”
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