Financial results

Hotel Chocolat shifts emphasis to digital in response to COVID-19 pandemic

By Anthony Myers contact

- Last updated on GMT

Hotel Chocolat had to close its high street shops over the Easter period because of the coronavirus pandemic. Pic: Hotel chocolat
Hotel Chocolat had to close its high street shops over the Easter period because of the coronavirus pandemic. Pic: Hotel chocolat

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Digital channels and steady growth in USA and Japan markets help high street chocolatier weather coronavirus storm.

Premium British chocolatier and multi-channel retailer Hotel Chocolat reported a 3% full-year gain in revenue, (£136.3m - 2019: £132.5m) but a 14% drop in the second half of the year due to the coronavirus pandemic when it announced (Tuesday 29 September) its preliminary results for the 52 weeks ended 28 June 2020.

Current trading

• Business well positioned to navigate existing and potential COVID-19 challenges

• Group trading is in line with management expectations for the first 12 weeks of FY21, with digital demand up over 150% on the comparable period in the prior year

• Formalised trading agreement with Rabot 1745 joint venture, for the purchases of its beauty products

• Strong financial position, with net cash of £16.5m and liquidity headroom of £51.5m as at 20 September

Pretax profit for the 52-week period was £2.4m ($3m), slightly beating the group’s own expectations.

With physical retail closing two weeks before Easter, rapid adaptations were made to recall inventory to the company’s Distribution Centre (DC) and enhance its digital channels, helping reduce the decline.

The company said in a statement the experience has informed plans for FY21 and beyond, including a fit-out of the new enlarged DC, providing 100% more supply chain capacity, and increased multichannel flexibility.

It also said its Japanese joint venture was progressing well with eight locations in the country and its USA operation is experiencing strong digital growth, thanks to a new e.commerce partnership signed with THG Ingenuity.

Angus Thirlwell, Co-founder and Chief Executive Officer of Hotel Chocolat, said: “The events of 2020 have challenged all of us, but also brought out the best in us, ethically, competitively, and professionally, making us better equipped to face the future.

“The challenges of COVID-19 have pushed us to accelerate many of our existing plans and strategic initiatives, helping to; strengthen our financial position, improve our multichannel capability, deepen customer engagement and loyalty, and accelerate the rate of product innovation, whilst continuing to make good progress in our two new and sizeable markets of the USA and Japan.”

Board changes

The company also announced that Chief Operating Officer Matt Margereson has stepped down as a director, but will remain part of the executive management team.

“Whilst uncertainty will continue for all of us in the coming year, our pipeline of potential growth opportunities has never been stronger. We are working hard to anticipate potential trading scenarios for the year ahead and are planning prudently to be ready to adapt quickly and effectively as the situation evolves. To achieve this, we have invested in our ability to increase production and expand our supply chain capacity as well as strengthen the leadership team to ensure a continued focus on product innovation, e-commerce, supply chain and sustainability,” said ​Thirlwell.

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