Tough Christmas trading at Thorntons

Related tags Cent Better Retailing Valentine's day Thorntons

Christmas sales fell compared to the particularly strong
performance in the previous year, but UK chocolate manufacturer and
retailer Thorntons said it was happy with its overall performance
in the first half of 2002/03.

Thorntons, the UK-based speciality retailer and manufacturer of chocolate, toffee and other sweet foods, reported tough trading conditions over the key Christmas period but said it remained happy with its overall performance.

For the seven weeks of Christmas trading to 28 December, Thorntons said its like-for-like sales were down 0.9 per cent compared to 2001, but that this was compared to a particularly strong performance (+8 per cent) in the previous year.

More encouraging was the strong rise in like-for-like sales in the rest of the year-to-date period. Prior to the Christmas period there were 27 consecutive weeks of growth, including the first 18 weeks of the financial year when cumulative like-for-like growth was +5.8 per cent, the company said, with the result that total like-for-like sales for the first six months of the year were ahead 1.6 per cent.

Total company sales increased by 2.3 per cent to £104.7 million during the half, with own-shop sales virtually unchanged at £83.8 million despite a reduction in the number of shops from 395 to 390. Franchise sales, at £7.7 million, were up 9.7 per cent and the number of outlets increased by 10 to 191.

Commercial sales grew by 7.4 per cent to £9.8 million, the company said, the first real growth in over four years, driven by distribution of Thorntons branded impulse products through third parties, in particular the major retail chains. Sales from the Internet and mail order business also improved, rising 37 per cent to £3.4 million, while royalty income from the licensed range of cakes, puddings, biscuits and other sweet food was £251,000, a considerable improvement on the £56,000 posted in the same period last year.

Peter Burdon, chief executive, commented: ''The strong sales performance over the first 18 weeks gives us confidence that our underlying business offer is improving and provides further evidence that we are moving strongly in the right direction in a difficult economic environment. The success we are seeing through a widening of the brand offer and new routes to market supports this.

"Christmas was tough against a strong performance last year, but I am pleased we improved our margin levels. Interim profits, whilst within the range of our expectations, are likely to be towards the lower end of that range. Consequently we are a little more cautious about the company prospects for the full year but remain optimistic given the strength of our product offer ahead of the important Valentines Day, Mothers Day and Easter trading periods."

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