Thorntons’ CEO Jonathan Hart has a serious problem on his hands. Thorntons is neither a high-end purveyor of cocoa delights, nor cut-price sweet shop. It’s a mid-market chocolateer, struggling to compete on either price or heritage. The business has been introducing heavy discounts to tempt chocolate lovers looking for cheap treats (hence the profit plunge) but doesn’t have the budget to invest in a campaign to pull in the connoisseurs. Another sticking point is that the relaunch of its website, one of the few areas of the business to see any real growth (online sales are up 5% in the first half), has been delayed until after Easter. That’s right, after the biggest chocolate celebration of the year. And Thorntons can't even blame the economic climate for its troubles: the chain was having problems long before the financial crisis.
Also having a bad week is Peacocks. White knight Alshair Fiyaz has decided to keep his textile billions to himself and pulled out of the bidding, leaving the beleaguered fashion chain with but one suitor: Indian textile and clothing firm S Kumars Nationwide. Peacocks’ 7,000 staff will be awaiting the decision from SKN’s new head honcho Shri Nitin S. Kasiwal with baited breath.
But it’s not all doom and gloom on the high street. Domino’s is having a marvellous year so far. The UK's biggest pizza delivery firm has reported a 14.6% rise in full-year pretax profit to £43.6m (excluding the cost of opening lots of new stores), beating market expectations by a million or so.
Domino’s isn’t just making loads of bread (literally and metaphorically), it’s also expanding faster than a warm doughball. The company opened 62 new shops last year, bringing the total to 726. Online sales are also hotting up, bringing in 43% more dosh last year to hit £183.1m.
Sporting goods retailer Sports Direct is today’s other high street winner. Presumably because people are working off all that pizza at the gym… Third-quarter profits rose 10% to £184.4m, up from £167.3m, a year ago. And Q3 total sales crept up by 9% to hit £453.8m. Most of the growth has come from online sales (take note Thorntons), and chief executive Dave Forsey reckons that Sports Direct should reach its EBITDA target of £215m for the year next quarter. Good news for owner Mike Ashley, who’s in for a healthy divi (which, in turn, is good news for Newcastle United).
And that’s all for today’s MT retail round-up. We’ll bring your more high street winners and losers as the results come in.