So long Thorntons. In another sad day for UK retail, the 110-year-old brand yesterday joined the depressingly long list of big names calling time on bricks and mortar to focus entirely online as the coronavirus pandemic continues to wreak havoc on the high street.
Italian owner Ferrero’s (unsurprising) decision to throw in the towel on the remaining 61 physical shops followed a miserable year of ongoing lockdowns disrupting first Easter and then Christmas trading.
Thorntons retail director Adam Goddard admitted the business had been operating for a long time in “a tough and challenging retail environment” and, despite its best efforts, the obstacles were “too severe” to continue.
While Covid proved to be the final nail in the coffin for the dated retail estate, the writing has been on the wall for battle-fatigued Thorntons since well before Ferrero took charge in 2015.
Lumbered with a bloated portfolio of almost 400 shops, Thorntons seemed a relic from another era when Hotel Chocolat launched its luxury, modern offering in 2003.
Thorntons, which was listed on the London Stock Exchange at the time, struggled to adapt and following a string of profit warnings took the panicked decision to start selling its chocolate boxes in supermarkets and discount retailers.
Volumes improved and the lights stayed on, but the brand became hopelessly devalued. Shoppers could pick up a box of Classic or Continental for cheaper in Tesco or Wilko than in its own stores.
Ferrero has invested £45m in Thorntons since the £112m takeover – as well as racking up losses of around £130m even before the pandemic hit – to improve the Alfreton factory, revamp and remaster the chocolate ranges and put the brand back on television. It also converted seven shops into all-singing all-dancing premium destinations complete with cafés, afternoon tea and create-your-own craftery counters, in an obvious nod to Hotel Chocolat.
But the pace of change has been excruciatingly slow. Ferrero, which is no retailer, has seemed unsure of how to proceed with the heritage brand.
Read more: As Thorntons losses mount, can Ferrero turn the heritage chocolatier around?
It already decided last year that 23 stores wouldn’t reopen when the first national lockdown ended, leaving just 61 owned sites remaining. These will now close, and its 104 franchise outlets will be the only physical manifestation of the Thorntons name on the high street (though the company did a poor job of communicating that fact yesterday, leaving many franchisees feeling cut adrift).
The focus now will be online – alongside ongoing work in the fmcg channel – as Ferrero attempts to adapt to changing consumer behaviour.
Goddard says net online sales increased 71% in the past year, but without the actual figures it’s difficult to put the rise into any context. It is likely a safe bet that, unlike Hotel Chocolat (where revenues jumped 11% to £102m in the second half of 2020), the online growth was not enough to make up for the locked-down retail stores.
A shift to online alone is not enough to paper over the cracks in a brand that despite attempts at a refresh remains tired, overly sweet and not innovative enough.
Chocolate has moved on, whether it’s the premium indulgence of Hotel Chocolat, the ethical push of Tony’s Chocolonely or new trends for dark milk or vegan.
The blanket media coverage – nationally and locally – of the closures yesterday proves the Thorntons name still punches far above its weight and remains a nostalgic draw for shoppers, but the question remains whether that can be turned into long-term growth in supermarkets and online.
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