Thorntons pins hopes on Xmas as its sales melt

 
Elizabeth Fournier
HIGH STREET chocolatier Thorntons is banking on a much-needed Christmas boost to its turnaround strategy, as store closures led to a decline in sales over the past year.

In the fourteen weeks to 6 October trading was in line with expectations, with total sales falling by one per cent year-on-year to £46m, hit by the closure of 36 standalone stores over the previous financial year. A further 10 stores and one franchise closed during the most recent trading period.

Own-store sales fell back by seven per cent overall, though this was lowered to 1.7 per cent on a like-for-like basis, once the effect of store closures was stripped out.

Franchise sales also declined to £2m from £2.6m a year ago, largely as a result of key partner Clinton Cards going into administration in May.

Chief executive Jonathan Hart said that the firm should benefit from stable commercial sales, citing a “strong order book” going into the peak Christmas trading period.

Forty-six per cent of Thorntons’ group sales come from commercial orders, and the channel was the only one to report growth in the period, with sales rising by 9.8 per cent year-on-year.

Though Hart acknowledged that the company’s outlook remained cautious in the face of weak consumer spending and an unpredictable economic environment, he reassured investors that he had “confidence in our strategy to rebalance our business, revitalise our brand and restore profitability and are making good progress in its implementation”.

Thorntons now has a total of 502 franchised and standalone stores, a net fall of just five stores from the end of June, with six new franchises offsetting the 11 closures.

“With sales essentially flat for the last four years, and forecast to decline slightly this year, focus remains on reducing costs to ensure a return to profits generation,” said Accendo analyst Mike van Dulke.