Thorntons Makes Progress With Rebalancing its Business

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Thorntons Makes Progress With Rebalancing its Business

Thorntons Makes Progress With Rebalancing its Business
February 26
12:01 2013

Despite the continuing contraction in its own stores and franchise businesses, Thorntons, the UK confectionery manufacturer and retailer, has reported a 2.9% rise in revenue to £133.7 million and a £2.2 million increase in profit before tax and exceptional items to £5.3 million for the 28 weeks ended 12th January 2013. The growth supports Thornton’s plan for its commercial channel to become the largest channel over the next couple of years while significantly reducing its own stores estate to between 180 and 200 stores in the medium term.

Sales of Thorntons branded product in the UK Commercial channel increased strongly by 16.1% to £51.8 million. However, the company’s Own Store sales declined by 8.3% to £62.6 million, mainly due to the closure of a further 13 stores in line with the long-term strategy. Like for like sales decreased by 1.5%. Franchise sales declined by 25.4% to £5.0 million, mainly reflecting the placing into administration of Thornton’s major franchisee in May 2012.

Thorntons Direct sales declined by 11.9% to £5.9 million due to the late deployment of its new website and operational issues in the peak selling period. International sales grew by 57.7% to £4.1 million and sales of Private Label grew to £3.9 million from £0.8 million.

As a consequence of the continued rebalancing of sales away from Own Stores into Commercial channels gross margin declined by 1.1% points.

Jonathan Hart, chief executive of Thorntons, comments: “We are encouraged by the overall progress we made during the first half of the year. This performance demonstrates that our strategy is generating results as we continue to rebalance the business, revitalise the brand and restore profitability.”

He adds: “Our customers have responded positively to our increased focus on innovation, value and service and our market share has grown further. This reflects the continued strength of the Thorntons brand across our multi-channel distribution model.”

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