Thorntons announced the conclusions of its strategy review and how management will re-position the business over the next three years. The aim is to rebalance the organisation and capitalise on Thorntons' brand strength through a more focused retail estate with a differentiated customer proposition, a renewed customer focus and a compelling commercial, franchise and online offering.
This strategy:
- Creates a de-risked business delivering returns over the medium term in line with the sectors in which we operate and positions the Company for sustainable future growth
- Creates a profitable and sustainable Own Store channel of around 180 stores with a differentiated and less seasonal proposition
- Focuses on driving good growth from our Franchise, Commercial and Thorntons Direct channels
Our Franchise estate will grow as Own Stores are closed and replaced with a Franchise in the majority of locations, thereby protecting contribution and customer goodwillOur Commercial channel will continue to grow strongly benefiting from increases in breadth and depth of distributionThorntons Direct will see its role change as the „customer direct‟ segment aligns with and supports Own Stores
- Delivers savings in supply chain and central costs of more than £2m on an annualised basis, the benefit of which will be delivered from FY2012/13 onwards
- Has been developed to ensure that we maintain and grow our factory production levels within current capacity as we rebalance our business across all channels
- Current trading continues to be challenging, in line with our expectations
- The Thorntons Board expects to recommend a nominal final dividend for the year ended 25 June 2011. Thereafter, the Board intends that dividends in the medium term should be sustainable and progressive with dividend cover broadly in line with sector peers.
Jonathan Hart, Thorntons’ Chief Executive, commented:
“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.”
Contacts: Nadja Vetter and Emma Crawshaw
