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Thorntons Restructures to Tackle Declining Profits

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Thorntons Restructures to Tackle Declining Profits

Thorntons Restructures to Tackle Declining Profits
September 08
11:43 2011

Although it increased sales by 1.7% to £218.3 million, UK chocolate manufacturer and retailer Thorntons has reported a 37.3% plunge in profit before taxation and exceptionals to £4.3 million for the 52 weeks ended 25 June 2011. Trading was particularly challenging in the company’s retail business, with own stores and franchise sales down by 8.9% and 10.8% respectively. After exceptional charges of £5.4 million, the company was left with a pre-tax loss of £1.07 million.

 

Thorntons is restructuring its own stores business to achieve an estate of between 180 and 200 outlets, located primarily in the top 150 retail locations. This will involve taking advantage of the 179 lease expiries over the next three years to close around 120 stores and explore opportunities to close a further 60 stores in weak locations over the same time frame.

 

“In the year that marks the centenary of Thorntons, I am pleased to report record overall sales, despite the challenging retail environment. This highlights the strength of our multi-channel strategy, as well as that of the Thorntons brand, with sales of branded products rising by 2.2%. commercial sales have grown by an impressive 25.9% over the full year,” says Jonathan Hart, chief executive of Thorntons. “Our goal over the next three years is to rebalance the business and to create a profitable and sustainable retail estate. While we expect to see the weakness in high street footfall and consumer spending to continue through 2012, we are confident that this strategy is right for the company.”

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