Hotel Chocolat today said its digital growth had more than offset the disruption caused to its shops by Covid-19 lockdowns.
The retailer says it has evolved from a “UK store-led brand to a digital-led brand” as it reported a 21% rise in revenues and returned to profit at the bottom line. More than 70% of sales were digital, through subscriptions or via wholesale partners, while its own stores played a complementary role in the business. Hotel Chocolat says stores were closed or disrupted for about six months, including peak trading period between November and April – from the run up to Christmas to Easter. Nonetheless, multichannel sales still grew, and grew faster once store reopened.
The retailer and chocolate manufacturer, ranked Top50 in RXUK Top500 research, today reported revenue of £164.6m in the year to June 27. That’s 21% up on the previous year. Top line pre-tax profits came in at £10.1m, before one-off costs of £2.3m. At the bottom line, pre-tax profits came to £5.6m, up from a loss of £7.4m a year earlier.
Trading in the first 13 weeks of the 2022 financial year is now in line with expectations.
The retailer, which says its ambition it “to become the world’s most sustainable chocolate brand”, has launched a gentle farming charter, promising a living income to the Ghanaian farmers who supply 97% of its cacao, in return for sustainable farming practices.
Angus Thirlwell, co-founder and chief executive of Hotel Chocolat, says: “These results show we have now evolved from a UK store-led brand to a globally ambitious digital-led brand. FY21 was a year where Hotel Chocolat improved on many fronts. Our digital and subscription-continuity models surged ahead and our global aspirations racked up more strong growth and progress.
“The continued challenges of Covid-19 pushed us to accelerate many of our existing plans and strategic initiatives, helping to strengthen our financial position, improve our multichannel capability, deepen customer engagement and loyalty, and accelerate the rate of product innovation, whilst continuing to make good progress in our two new and sizeable markets of the USA and Japan.
“A real highlight was developing the new Hotel Chocolat Gentle Farming Charter, applying all we have learned by farming ourselves in Saint Lucia, to ensure all our farming families can earn a living income in return for climate-smart farming. The living income takes into account actual family living costs and realistic farm output. In return for the higher price farmers commit to sustainable farming practices, planting of indigenous shade trees and zero illegal child labour.
“I am confident that the strategic progress we have achieved over the past year has improved the performance and prospects of the business for significant years to come.
Hotel Chocolat raised £40m in July 2021, on top of £23m raised in March 2020, to fund steps including upgrading its technology to grow its multichannel business, and to expand its factory.
During the year, Hotel Chocolat increased production capacity by 66%, to the point where it can support £250m of chocolate sales a year. It has raised £40m to expand its factory capacity to 160000 sq ft, and says it will be able to support £500m in chocolate sales in three years time. The Hut Group is managing its fulfilment in its US market. It has also doubled the size of its distribution centre to 200,000 sq ft to house the stock it will sell online in the 2021 peak season.
Hotel Chocolat was founded in 1993 and now sells online and through 150 shops in the UK, Japan and the United States. It has a cacao estate and hotel in Saint Lucia and a cacao-themed restaurant in London.