Insider Media Limited

Thorntons, the Alfreton-based confectioner, has revealed plans to shut up to 180 of its UK outlets over the next three years. The details of the exits emerged as the company entered into a refinancing package worth £57.5m. Thorntons announced its plans to close the stores as a result of its strategy review, which is centred around a "profitable and sustainable" own-store channel of just 180 stores.

Thorntons franchise estate is set to grow with the mass exits from own-stores. At least a third (120) of the company's stores will shut in the next three years, with a possible further 60 to follow.

The chocolatier said the remaining 180 stores would be "differentiated and less seasonal".

Supply chain and central cost savings of more than £2m are expected to be made every year from the alternative structure.

Jonathan Hart, Thorntons' chief executive, said: "Thorntons is a strong, trusted and highly valuable brand with excellent potential. Our goal is to refocus the business across all channels and seek to deliver industry competitive returns over the next three to five years.

"Although we see the prospect of weakness in high street footfall and consumer sentiment continuing, I am confident that this strategy is right. We continue to adapt in order to meet the changing needs of our customers, while at the same time retaining our current presence on the High Street through our Own Stores and our Franchise business."

Thorntons said it may re-site or open stores in the UK's top 100 retail locations if opportunities arise and if the potential is confirmed.

Yesterday, the business revealed it had signed and agreed new bilateral revolving credit agreements which will replace an existing package worth £52.5m, set to mature in August 2012.

The new facilities are set to mature in October 2015 and remain unsecured, the business said. They are set to cost Thorntons £400,000 in one-off charges, it added.

They include a £12.5m loan from Barclays Corporate.

Thorntons also said it is to outsource its distribution and warehousing functions to DHL which it said could bring about more than £5m in benefits over a six-year contract. Transition costs of up to £680,000 will hit the company in its first year of the deal, it added.

Thorntons employs more than 4,000 people across its 600 sites around the country.