Shake-up puts Thorntons into the red

Thorntons, the family-controlled chocolate group, announced a pounds 22m restructuring yesterday that pushed the Derbyshire company pounds 14m into the red and will see its focus shift from manufacturing to retailing.

The changes are part of a "root and branch" review conducted by chief executive Roger Paffard, who joined in January.

Ninety new shops will open in the next three years, taking the total to 359. Mr Paffard says that only 143 of Thorntons' current shops are the right size and in the right location. These will be refurbished while 126 others will close and 216 others will be opened on more suitable sites.

The expansion is expected to create 550 full-time equivalent jobs .

New retail formats are being tested. Cafe Thorntons features a coffee bar at the front which sells pastries and ice-cream.

The "Sweet Factory" format includes a premium "pick 'n' mix" counter in addition to the usual Thorntons ranges. Three other new formats will also be tested.

"We're going too fast for it to be painless," Mr Paffard warned. "It is putting quite a bit of strain on the business and it may affect Christmas trading as so many of our staff will be new."

He said the restructuring was necessary to address several years of under- performance, which had seen erratic profits and falling market share. He blamed dated store designs, a "manufacturer's mentality" and labour- intensive practices in the shops.

Staff have spent too much time either on administrative tasks or in product preparation such as "chopping up toffee", Mr Paffard said.

Thorntons has already announced the sale of its Belgian subsidiary, Gartner Pralines and is also withdrawing from France. As announced in June, its five manufacturing facilities will be consolidated into two with the loss of 143 jobs.

Of the pounds 21.9m charges, pounds 8m is to cover the cost of withdrawing from the continental subsidiaries, pounds 10m for the retail restructure and pounds 3.4m for the rationalisation of the UK plants.

The company plans to increase capital expenditure from pounds 7m to pounds 17m a year for the next three years.

Pre-tax profits in the year to June were down sharply to pounds 8m from pounds 11m the pervious year. Trading in the first quarter has been strong with like- for-like sales 19 per cent ahead of the same period last year. Last year's sales were ravaged by the summer heatwave.

Thorntons shares jumped 11p to 178.5p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness