Struggling retailer Thorntons has slumped to half-year profits of less than £1 million after counting the cost of a poor Christmas performance.
The group’s own-store sales were down by 5.5 per cent on a like-for-like basis in the 28 weeks to 7 January as customers proved more likely to buy promoted lines and the company’s margins were hit by rising raw material costs.
Underlying profits were down 61 per cent to £3.1m but including nearly £2.5m of charges to cover loss-making stores. Thorntons reported bottom-line profits of £618,000 for the six-month period.
It scrapped its half-year dividend but chief executive Jonathan Hart insisted that the company’s strategy was the right one after he unveiled plans last year to close at least 120 stores and drive more business through supermarkets and commercial channels.
He said yesterday: “These results and the economic climate only reaffirm the need for change.”
The company, which employs some 3,000 staff and has more than 7 per cent of the UK chocolate market, ended the period with 344 stores after closing 20 outlets as their leases expired.
It envisages an estate of between 180 and 200 stores in “sustainable” locations.
Hart added: “While our sales emphasis will develop through our commercial channel, our reduced retail estate will remain an important shop window for the brand.”
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