Thorntons hails turnaround plan

Retailer Thorntons said it was "heartened" by recent trading after its Best of British range gave a boost to its turnaround plans.

The group's note of optimism came despite a sharp fall in underlying full-year profits to just £850,000, as it counted the cost of weak Christmas trading and some of the most challenging conditions in its history.

However, shops sales in the final quarter of the year to June 30 returned to growth on a same-store basis and the group's second half performance was also its best in three years.

Its drive to reduce its reliance on the peak seasons of Christmas and Easter has seen more limited edition chocolate ranges, such as this summer's Union Jack flag and a London bus, as well as a greater focus on customer standards.

Thorntons closed 36 stores in the period as part of its drive to exit under-performing high street locations and focus on a core estate of 180 to 200 sites. Ahead of Christmas it will refurbish three stores with a new format and has vowed to review almost all of its products over the next year.

Chief executive Jonathan Hart, who has completed the first year of a three-year plan to restore the company's fortunes, said the actions were starting to deliver benefits.

He added: "The quality of our products, our brand and customer loyalty remain our core strengths and we are pleased that our products continue to be as popular as ever.

"We do not foresee the economic landscape improving in the near future. We have made our plans accordingly and believe that the actions we have taken and continue to take will deliver improvements to profitability. We therefore approach the coming year with cautious optimism."

Derbyshire-based Thorntons wants to generate half its sales through commercial channels such as supermarkets within the next two years. Sales in this sector grew by 7.9% to £85 million over the year but margins came under pressure in a period when the total boxed chocolate market declined by 4%.

Revenues at its franchise stores were down 8% to £10.7 million after the division was hit by the administration of Clinton Cards, which ran 46 outlets. Overall sales declined by 0.5% to £217.1 million, while the company recorded a bottom-line loss of £2.2 million due to a number of exceptional items.