Sales fall puts the bite on Thorntons

CHOCOLATE retailer Thorntons yesterday warned that falling sales had worsened in recent weeks as it announced a head office jobs cull to cut costs.

Like-for-like sales at its 377 stores fell 6 per cent in the ten weeks to 26 June - deepening from the 4.6 per cent drop posted in the previous quarter - as the hot weather hit trading.

The summer period is traditionally Thorntons' weakest but a stock overhang has also forced the firm to cut prices more sharply than expected, delivering a further blow to sales.

A review of the business carried out since the end of June will see 35 staff axed from its head office in Derbyshire over the next three months, the company added.

Thorntons said its excess stock levels had now been cleared, but same-store sales over the year to 26 June were down 3.5 per cent as the firm also struggled with tough trading conditions.

The firm issued a profits warning in May, when it announced that chief executive Mike Davies would retire in favour of a successor with "specific retail expertise".

Thorntons also decided to pull out of low-margin private label work at the end of last year, causing a 5.7 per cent decline in total commercial sales over the year.

There were some brighter spots in the business, which has traded in line with expectations since the warning. Its Thorntons Direct website was boosted by recovering sales of corporate customers in the second half of the year, pushing up sales 17 per cent.

Franchise sales were up 20 per cent on last year, when the business was disrupted by the administration of the Birthdays greeting card chain, which hosted franchises.