Hotel Chocolat in the red amid ‘challenging’ current trading landscape
Chocolate maker Hotel Chocolat has posted a £9.4m loss but said “people are still treating themselves with affordable luxury” despite a cost of living crisis.
Its full-year results came in contrast to the previous year’s, where the London-listed firm posted a £3.7m profit after tax.
“It goes without saying that the current environment is challenging on multiple fronts,” Angus Thirlwell, co-founder and chief executive officer of Hotel Chocolat, said on Thursday.
Its UK sales increased 35 per cent on the year, with bosses saying they were confident in the brand’s reputation despite the economic slowdown.
However, the business has been hit hard after the collapse of its Japanese business, writing off around £22m from its joint venture, only set up in 2018.
Bosses had been forced to ask themselves “many questions as to how we could have done this [joint venture] differently,” Hotel Chocolat admitted.
The firm said it was “adopting a deliberately prudent approach to the outlook on trading,” given the volatile macroeconomic situation.
It said it was “manufacturing controlled levels of seasonal inventory” and would be focusing on “quality over quantity” by reducing its levels of discounting.
Investors have been left with a bad taste in their mouth but the company was confident its reputation would help it boost its sales this Christmas, in stores and online, according to Sarah Riding, retail partner at law firm, Gowling WLG.
“The business’ new stores showcase a revamped format and are looking to capitalise on the recovery of physical retail, while CEO and co-founder, Angus Thirlwell, will be hoping the cost management implemented mitigate the recent inflationary pressures,” she added.