Thorntons continues to melt in high street heat
Thorntons revealed a further blow to the high street this morning as it revealed a £1.9m fall in sales in its latest eight-week trading update. The beleaguered retailer said although sales for the full year to 25 June had increased slightly, franchise and own stores sales declined rapidly in the past two months.
The Alfreton-based chocolatier reported its fourth quarter trading update for the eight weeks to 25 June this morning. The report comes just days after the retailer announced plans to axe up to 180 of its UK stores.
For the year to 25 June, total company sales increased 1.7 per cent to £218.3m.
Over the past two months, Thorntons Direct sales increased 10.7 per cent to £800,000.
However, total sales for the eight-week period declined £1.9m to £20.6m. Commercial sales experienced a slight upturn as the division grew 0.4 per cent to £5.9m.
Own store sales declined 11.9 per cent to £12.8m with a like-for-like sales decline of 10.6 per cent.
Franchise sales also decreased 19 per cent to £1.1m over the period.
In a statement to the Stock Exchange this morning, Thorntons' board said trading was in line with expectations.
The board also said it was considering a provision of around £3.5m in the financial results for the year to 25 June 2011 in relation to under-performing stores identified for closure as a result of the strategic review. In its strategic review, the company said it would close the under-performing stores over the next three years.
Jonathan Hart, Thorntons' chief executive, said: "This eight week period represents less than 10 per cent of our annual sales. As highlighted at the strategic review at the end of June, trading during this period has continued to be challenging, particularly in our own stores and franchises.
"Whilst commercial sales have only grown slightly they increased by an impressive 25.9 per cent over the full year. We are encouraged by our forward orders for Christmas 2011. Thorntons Direct had a good Fathers Day trading period which contributed to the 10.7 per cent increase in sales."
Hart added that the chocolatier "saw the weakness in high street footfall and spending continuing in the new financial year".
He said: "As a business we are now focusing on the implementation of our transformation plan. Thorntons is a strong brand with excellent potential and I am confident that this strategy of rebalancing the business across all channels will deliver results."