Thorntons feels the heat as chocs sales melt in the sunshine

Simon English
15 Jul 2009

Britain is a nation of chocoholics — but not when the sun's out.

That's the message from toffee and Viennese truffles house Thorntons, which has seen sales slip during the past 10 weeks.

Sales were down 2.7% to £28 million due to “the hot weather in June”, the company said.

The result was not helped by the collapse of Birthdays in May. Birthdays was one of Thorntons's leading franchise operators, selling its goods from 94 outlets.

Chief executive Mike Davies is in talks with Clinton Cards and other potential franchisees to sign deals that would replace those lost sales.

Summer is often a sticky time for Thorntons, which does best over the Easter and Christmas periods.

It usually makes a loss in the second half of the year, and has been forced this year into heavy discounting along with much of the High Street.

Businesses have been cutting back on spending in the face of the recession, sending fewer gifts to clients and staff.

This has hit Thorntons particularly hard. Sales at Thorntons Direct — the company's call centre and internet arm -- slumped 31% to just £800,000.

Thorntons has been around since 1911 but has suffered a particularly rocky couple of years.

Analysts say turning around the business has been harder than Davies expected.

He was relatively upbeat today however, predicting that profits for the year will beat City expectations of £5.4 million thanks to cost cuts and a credit from the company pension fund.

“Our cost initiatives continue to deliver results,” he said. “These, combined with some exciting new product developments, put us in a good position to emerge from the current conditions a more profitable business.”

The shares, down by a third this year, opened today at 72.5p, which values the business at £50 million.

While Thorntons is complaining, other retail groups have enjoyed the hot weather.

Soft drinks group Britvic yesterday said sales are up smartly and profits will beat City expectations. Clothes retailers have also seen a bump in the last few weeks.