Thorntons has a sweet recipe for recovery

Published on Tuesday 7 September 2010 22:25

STRUGGLING chocolatier Thorntons expects to have a new chief executive in place soon to lead an overhaul of the firm in the run-up to the key Christmas trading period.

The 99-year-old company, which yesterday reported flat sales and a 2.4 per cent dip in profits, will launch a number of new products such as ice cream and biscuits to revive its fortunes. It also promised to revamp a number of its existing product lines and sharpen its overall marketing efforts.

Executive chairman John von Spreckelsen said: "We have strengthened our senior retail management team and … this, together with extensive product innovation and changes to the promotional and marketing programmes, should have a positive impact on trading in the lead-up to Christmas."

Thorntons, which has some 375 retail outlets, issued a profits warning in May prompted by disappointing Easter sales and the impact of severe winter weather. The group also said at that time that chief executive Mike Davies would retire at the end of September in favour of a successor with "specific retail experience".

His replacement should be announced "in the not too distant future", von Spreckelsen said yesterday.

Own store sales fell 3.6 per cent during the year to the end of June, and were only partially offset by a 9.8 per cent increase in sales to commercial partners such as supermarkets. Franchise sales were down 14.7 per cent in the wake of last year's administration of high street greetings card chain Birthdays.

Overall revenues for the year were flat at 215 million, while pre-tax profits eased to 6.1m - below analysts' expectations. Margins were squeezed as a result of the higher cost of raw materials such as cocoa and butter.