Impairment charges lead to profit melt at Thorntons
Chocolate retailer Thorntons grew its revenues by 1.7% to £218.3 million in the year to 25 June following a strategic review of its business.
Pre-tax profits fell to £4.3 million from £6.9 million in 2010 as the cost of exceptional items, including impairment and onerous lease provisions, rose to £5.4 million. This resulted in the company making an overall pre-tax loss of £1.1 million compared to a pre-tax profit of £6.1 million in 2010.
Thorntons said is was continuing to implement the strategic review announced earlier in the year in order to "create of a profitable and sustainable Own Store channel" of approximately 180 stores over the next three years.
This year the retailer is celebrating its centenary.
Jonathan Hart, Thorntons' Chief Executive, said: "In the year that marks the Centenary of Thorntons, I am pleased to report record overall sales, despite the challenging retail environment. This highlights the strength of our multi-channel strategy, as well as that of the Thorntons brand, with sales of branded products rising by 2.2%. Commercial sales have grown by an impressive 25.9% over the full year and we are encouraged by our forward orders for Christmas 2011.
"As announced at the time of our strategic review, our goal over the next three years is to rebalance the business and to create a profitable and sustainable retail estate. While we expect to see the weakness in High Street footfall and consumer spending to continue through 2012, we are confident that this strategy is right for the Company."
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