Hotel Chocolate’s bid to become a global brand has taken another significant step with the news it plans to open at least five outlets in Japan and the United States before the end of the year.
The company announced it is targeting international expansion to drive long-term growth. The UK chocolatier has over 100 stores in the UK and a bunch in Denmark. Its profits rose by 13% in the latest financial year.
Hotel Chocolat’s co-founder and CEO Angus Thirlwell told Reuters the expansion was about “firing up the medium to long-term growth strands that are going to lead to us becoming the global leader in premium chocolate.”
For the year ended July 1, Hotel Chocolat reported pretax profit of £12.7m ($16.6 million), 13% higher than last year, on revenues that were 11% higher at £116.3m ($153.11m).
In an interview earlier this month, Thirlwell said the company was actively looking to expand into markets outside Europe.
Britain is set to leave the European Union in less than six months’ time, and the fall in the value of the pound has increased raw material costs for the company, which manufactures 97% of its product in Britain.
“The decline of sterling created pressure on raw material costs, but we have been able to mitigate this by improving productivity and leveraging increased scale,” said Thirlwell.
Japan and the United States are top priorities for Hotel Chocolat as its London stores and online operation attracts customers from those countries most, Thirlwell said.
“We are increasingly confident that international expansion presents a growth opportunity, and will be adopting a cautious ‘test, learn, grow’ approach to our new partnership in Scandinavia and our new ventures in the US and Japan, where we intend to open our first stores this winter.”
Thirlwell said the company will still explore opportunities in Europe as well as expanding further in Britain.
“The encouraging performance of our UK channels means we remain confident of further growth, with an exciting range of new product innovations for this autumn, including our Chocolat Cream Liqueur and the Velvetiser in-home Hot Chocolat system,” he said.
In the company’s Preliminary Results Report, Thirlwell confirmed that Greg Hodder, a non-executive director, will be “very involved in overseeing our US strategy, leveraging his wealth of experience growing British brands in the US, including Charles Tyrwhitt shirts. “
The new Japanese joint venture will be led by Chris Horobin, the experienced former CEO of QVC Japan.
Lysa Hardy will also join the company this month, in a new position of chief marketing officer, having previously held roles as CMO at Holland and Barrett and Joules.