Stores’ collapse takes bite out of Thorntons

The collapse of its largest franchise operator in May lost Thorntons 94 of its outlets and landed it with a £500,000 bad debt. But chief executive Mike Davies said that 37 stores have already reopened after Clinton Cards bought back the greeting cards shops from administrators. Another 38 franchises should begin trading before the crucial pre-Christmas sales period.

Shares in the confectioner lept almost 8% to 99¾p after it posted better-than-expected results and reported a pick-up in trading.

"Our performance in the second half was a lot better — we actually had like-for-like growth," Davies said.

Pre-tax profits dropped 4.5% to £8.1 million for the year to the end of June as sales rose 3.2% to £214.8 million.

Davies added that demand from corporate customers has started to recover.

Thorntons was hit hard by its main business customers — financial firms and car dealers — cutting back on client gifts.

The company also admitted it had made a mistake in the timing of a trial of redesigned stores and that it would not roll out the new look to the rest of its stores.

The makeover of shops, which included its Bluewater and Kingston branches, was intended to create a more "foodie" image.

Its final dividend was unchanged at 4.85p.