Hotel Chocolat gives covid-19 trading update as it secures new £35 million credit facility
Hotel Chocolat has said the closure of all its retail stores due to the covid-19 lockdown has a material impact on trading, especially over Easter.
However, the retailer said it has been able to redirect demand for its products online, although this has not fully mitigated the total retail sales loss in its key three-week Easter period.
Easter represents the second biggest seasonal peak for the business. This year online demand exceeded the quantity of orders the retailer could accept in the period due to the introduction of safe working practices during the pandemic.
Angus Thirlwall, Hotel Chocolat chief executive, said: “Our market leadership in digital and subscription chocolate is more valuable than ever and we will accelerate the planned innovations and investments behind these models. Plans are in progress to re-open our physical locations when appropriate, with adjustments in place to make shopping with us safe and pleasurable again.
“With the plans we are putting in place over the next months, we aim to be able to switch the vast majority of demand to online should the need arise in the future.”
Hotel Chocolat has also announced that it has secured an increase to its banking facilities in the form of a new £35 million revolving credit facility with Lloyds Bank. This has replaced its existing £10 million overdraft facility and follows the retailer’s recent equity placing through which it raised £22 million to fund growth capital investment and to provide operational headroom.
Thirlwell added: “Hotel Chocolat is a strong brand with differentiated products, a loyal customer base, and a vertically integrated direct-to-consumer business mode, built for agility. It is a reflection of these attributes that we have been able to add additional banking cover to the over-subscribed equity placement in March. The financial headroom gives us greater resilience against ongoing disruption and enables us to move onwards with longer-term growth opportunities.”
