Overall sales rose 1.7% to £218.3M for the year to June 25 2011 and its share of the branded chocolate market reached 7.7%. Profit before tax and exceptional items was £4.3M compared with £6.9M last year leading to an overall pre-tax loss of £1.1M.
Mark Robson, the firm’s financial director, told FoodManufacture.co.uk: “The record-breaking Easter heat wave and the severe Christmas weather both reduced high street foot fall which impacted sales.”
Retail sales, through Thortons' own stores, franchises and Thorntons Direct fell 8.2% to £139.5M compared with £152M last year.
Worst in living memory
Jonathan Hart, Thorntons' chief executive, added that trading conditions this year were "worst in living memory". He predicted that the tough trading conditions would persist for the whole of next year as the fear of double-dip recession continued to impact sales.
But Hart highlighted encouraging performance for commercial sales which climbed nearly 26% to £78.8M compared with £62.6M last year.
In June, Thorntons unveiled the results of a strategic review designed to reverse the group’s poor financial performance.
John von Spreckelsen, the firm’s chairman, said the review had resulted in a “clear plan to transform and de-risk our business over the next three years. This plan will create a profitable and rebalanced organisation, a customer-focused multi-channel business and a revitalised brand”.
As part of its rebalancing strategy, Thorntons plans to maintain a network of 180-200 stores over the next three years while a further 180 stores will be replaced by franchises. The timing of store closure will reflect the termination of leases.
Christmas and Easter
Hart told FoodManufacture.co.uk that the firm aimed to encourage customers to make five visits and five purchases from its stores during a year. “At present, about 50% of customers come once or twice a year – at Christmas and Easter.”
Since 2006 the firm has aimed to decouple manufacturing operations from its own stores by boosting commercial sales to supermarkets and developing online sales via Thorntons Direct.
Spreckelsen said that Thorntons, now celebrating its centenary year, is “… now in a good position to deal with the underperformance and restructuring of the own stores estate without causing any significant impact on our manufacturing capacity.”
Restructuring of the firm’s IT services and warehousing and distribution activities together with other cost savings are expected to deliver a full-year benefit of £2M that will be realised in the 2012/13 financial year.