Thorntons chief quits as sales fall continues

CHOCOLATE-MAKER Thorntons yesterday issued its second profits warning in as many months, as like-for-like sales continued to tumble and its wholesale business missed expectations, prompting its chief executive to step down.

The chain said that Mike Davies had decided to retire "in the light of new challenges, principally the management of Thorntons' retail estate".

Davies decided to make way for a chief executive with the specific retail expertise needed to take the business forward, Thorntons said in a statement.

He will remain in place until a successor has been found, with non-executive chairman John von Spreckelsen taking on an executive role in the meantime.

Thorntons said it had "continued to experience a tough trading environment", with like-for-like sales dropping in its stores and higher-than-anticipated discount costs on clearing excess stocks.

Commercial sales – those to other retailers – were also lower than expected during the end of April and early May, although the group said they have since recovered to previously forecast levels.

The profits blow saw shares closed down 12 per cent at a nine-month low of 87.6p. They dropped as much as 14 per cent in intra-day trading.

Thorntons revealed last month that it suffered disappointing trading in the key Easter period, with like-for-like shop sales down 4.6 per cent in the 14 weeks to 17 April.

That was greater than the 2.4 per cent decline seen in the previous six months.

As a result, it then said that it expected pre-tax profits before exceptionals to be lower than previously anticipated. Its update to the market on 20 April saw the group dropping its forecast to 7.5 million.

Recent weak trading – with like-for-like sales continuing to decline – meant that its expectations had fallen even further, the group said. It was not more specific on its profits forecasts.

Thorntons – established by Joseph William Thornton in 1911 – has about 600 stores.

The firm's next trading update is due on 14 July.