Thorntons sales decline continues
reporting concerning interim results.
The manufacturer, retailer and distributor of premium chocolate, blamed a poor retail market in Britain for a sales decline principally caused by the poor performance of its own shops.
Overall sales for the financial half-year, ending 7 January, were £112.3m (€164m), a decline of 6.2 per cent on the previous year.
Operating profit for the company fell to £14.1m (€20.6), down five per cent.
Profit margins however were held stable at around 12 per cent.
Sales in Thorntons' own shops were £80m, a like for like decline of 4.8 per cent.
Sales in franchise shops also dropped to £8.3m, a like for like slump of 5.3 per cent.
Management made note that both these declines were heavily influenced by the company's disappointing Christmas sales.
The company's branded commercial sales were £13.4m, with management stating increased sales to supermarkets had been offset by reduced sales to high street retailers.
Thorntons had decided to withdraw from its high street commercial accounts, which is what led to the decreased sales to high street retailers.
The company also lost out in the private label market, with commercial sales down to £7.1m, a fall of nearly 20 per cent.
One area of promise for the confectioner is its Thorntons Direct business, where sales reached £3.5, an increase of 3.5 per cent.
Although management said that improvements had been made in factory costs Thorntons increased borrowing.
The company precarious debt position worsened to the tune of £4.8m, bringing its total debt to £17.3m.
Despite the situation at the company, which rejected a takeover bid from its former chairman earlier in the year, management remains upbeat about the situation.
"Despite very tough trading conditions, the actions taken by management to improve like for like sales, tighten costs and control margin should ensure that the results for the full year will be in line with out expectations," acting chairman John Jackson said.
Thorntons noted that sales were picking up in its own shops and that sales had been better than last year over the Valentine's period.
Better sales in the start of the second half were attributed to improved seasonal ranges, which the company said it expected to continue over the Easter season.
Jackson had previously told ConfectioneryNews.com, that the company will look to build on its success in commercial channels and with its delivery service, Thorntons Direct.
