Hotel Chocolat is working out how to open its shops safely when it’s permitted to do so, following the Covid-19 lockdown, while planning for ways of shifting business online quickly when needed.
The multichannel chocolate manufacturer and retailer, ranked Top100 in RXUK Top500 research, today updated investors on its trading over an Easter period in which online demand outstripped its capacity – while all its shops were closed. Easter is the second largest peak for the business and, said Hotel Chocolat, the fact that its shops had at that point all been closed for nearly three weeks, from March 23, had a “material effect on trading”. The retailer was able to shift business online quickly, after ensuring its warehouse could operate safely and with a reduced product range. This, it said, was encouraging but did not fully compensate for lost sales over the period. It is now finding ways to improve its processes.
Angus Thirlwelll, chief executive and co-founder of Hotel Chocolat, 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.
"Every day at Easter the online demand exceeded the quantity of orders we could accept, due to the requirements to ensure safe working, combined with the short adjustment period. 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.”
Since the coronavirus pandemic started, Hotel Chocolat has raised £22m in equity to fund capital investment and to give the business some headroom. It has also increased its available bank lending to £35m. This, it says should give it more than enough cash even if business disruption continues throughout this year.
“The financial headroom,” said Thirlwell, “gives us greater resilience against ongoing disruption and enables us to move onwards with longer-term growth opportunities.”
The retailer has given NHS and emergency service workers a 50% discount and says it has “shipped many tens of thousands of parcels to hep keep morale and stamina up.”
The Hotel Chocolat business was founded in 1983 and has traded under its current name since 2003. It now has 96 shops in the UK and abroad.
Image courtesy of Hotel Chocolat